externalcostsofpoorhealth

externalcostsofpoorhealth内容摘要：

41 Q P 20 10 20 S 9 11 6 8 D Dt SMB 14 Tax=6 42 Can show a per unit tax on suppliers can also solve externality problem • Per unit tax will shift up supply curve by an amount t • Verticle axis is amount transacted between buyers/sellers • Without tax, at price P1 producers willing to supply Q1. • When tax is imposed, suppliers receive a price, then pay t back to the government • In order fir supply to stay at Q1 with a tax, their price must rise to P1+ t 43 Q P MC MC + t P1 P1+t Q1 44 • At P1, firms were willing to supply Q1 • With an excise tax, in order for firms to supply Q1, the price must increase to P1+t – Firm receives P1+t – Pay the government t in taxes – Net P1 • Therefore, an excise tax will shift the supply curve up by the amount of the tax 45 Q P PMC SMC Q2 Q1 P1 P2 46 Q P PMC SMC Q2 Q1 P1 P2 PMC + t t P2 t 47 Example • Demand: Pd = 20 – 2Q • PMC Ps = 2 + Q • SMC Psmc = 2 + 2Q • Market output: Ps=Pd • 20 – 2Q = 2 + Q • Q = 6, P=8 48 • Social Optimum: Pd = Psc • 20 – 2Q = 2 + 2Q • Q=, P=11 • At the Market output, Q=6, so SMC = 14 • DWL = area d • D = (1/2)Height*base = (1/2)()(148) = 49 Q P PMC SMC 2 20 10 6 11 8 14 d 50 Example • Demand: Pd = 30 – .3Q • PMC: Ps = 2 + • SMC: SMC = 2 + .2Q • Social optimum • Pd = SMC • 30 .3Q = 2 + .2Q • 28 = .5Q • Q= 56, P= 51 • Market equilibrium • Pd=Ps • 30 .3Q = 2 + .1Q • 28 = • Q = 70, P = 9 52 • What is the optimal tax? • Want Q = 56, the social optimal • People will demand 56 when their price is • What price will encourage firms to supply 56? • Firms will receive P+t, but they have to give t back to the government. • P = 2 + .1Q = 2 + .1(56) = • When firms receive , they will supply 56. • Therefore – = (tax) 53 Q P PMC SMC 56 70 9 PMC + t 30 100 2 54 Excises taxes on poor health • Alcohol and cigarettes are taxed at the federal, state and local level • Some states sell liquor rather than tax it (VA, PA, etc.) • Most of these taxes are excise taxes the tax is per unit – Rates differ by type of alcohol, alcohol content – Nearly all cigarettes taxed the same 55 Current excise tax rates • ow/ • Cigarettes – Low: KY ($), VA ($), SC($) – High: RI ($), NJ ($) – Average of $ across states • Beer – Low (WY, $) – High (SC, $) 56 57 Federal taxes • Cigarettes, $• Wine – $– $– 21% alcohol • Beer, $ a can • Liquor, $ per 100 proof gallon (50% alcohol), or, $• Total taxes on cigarettes are such that in NYC, you spend more in taxes buying one case of cigarettes than if you buy 33 cases of wine. 58 Do taxes reduce consumption? • Law of demand – Fundamental result of micro economic theory – Consumption should fall as prices rise – Generated from a theoretical model of consumer choice • Thought by economists to be fairly universal in application • Medical/psychological view – certain goods not subject to these laws 59 • Starting in 1970s, several authors began to examine link between cigarette prices and consumption • Simple research design – Prices typically changed due to state/federal tax hikes – States with changes are „treatment‟ – States without changes are control 60 Difference in Difference Before Change After Change Difference Group 1 (Treat) Yt1 Yt2 ΔYt = Yt2Yt1 Group 2 (Control) Yc1 Yc2 ΔYc =Yc2Yc1 Difference ΔΔY ΔYt – ΔYc 61 time Y t1 t2 Yt1 Yt2 treatment control Yc1 Yc2 Treatment effect= (Yt2Yt1) – (Yc2Yc1) 62 Key Assumption • Control group identifies the time path of outes that would have happened in the absence of the treatment • In this example, Y falls by Yc2Yc1 even without the intervention • Note that underlying „levels‟ of outes are not important (return to this in the regression equation) 63 time Y t1 t2 Yt1 Yt2 treatment control Yc1 Yc2 Treatment effect= (Yt2Yt1) – (Yc2Yc1) Treatment Effect 64 • In contrast, what is key is that the time trends in the absence of the intervention are the same in both groups • If the int。