When measuring inequality, value judgements are imposed, often implicitly, at several stages. In particular, the choice of ‘welfare metric’, adult equivalence scale, unit of analysis and the inequality measure itself cannot avoid value judgements. This paper illustrates the effects of using...

This paper examines the potential distributional impacts of demographic change, particularly population ageing, and changes to labour force participation that are projected to arise over the next 50 years. The approach involves calibration weighting of the Treasury’s microsimulation model,...

The objective of the paper is to explore the saving and consumption responses of a representative household to a range of policy interventions such as changes in taxes and pension settings. To achieve this, it develops a two-period life-cycle model. The representative household maximises...

This note provides an elementary introduction to the measurement of welfare gains from the introduction of a new good, based on the concept of the ‘virtual price’ and standard expressions for welfare changes arising from price changes.

Professor John Creedy presents his reflections on the Tax Working Group Report (Report available here.) John presents his findings to a Wellington audience on Tuesday 23 February and in Auckland on Thursday 25 February.

This note sets out some basic results regarding calculation of the Gini measure and its standard error in the context of cross-sectional micro-datasets where sample weights are provided for aggregation from sample to population values.

The aim of this paper is to provide an introduction to the concept of user cost and its determinants. Particular attention is given to the influence of taxation. The concept of user cost relates to the rental, the rate of return to capital, that arises in a profit maximising situation in which...

This paper investigates the implications of population ageing and changes in labour force participation rates for projections of revenue obtained from personal income taxation and a consumption tax (in the form of a broad-based goods and services tax). A projection model is presented, involving...

This paper presents stochastic projections for 13 categories of social spending in New Zealand over the period 2011-2061. These projections are based on detailed demographic estimates covering fertility, migration and mortality disaggregated by single year of age and gender. Distributional...

A recent review of empirical estimates of the elasticity of taxable income (ETI) concluded that ‘the US marginal top rate is far from the top of the Laffer curve’ (Saez et al, 2012, p.42). This paper provides a detailed examination of the analysis underlying this conclusion, and considers...