Public finance with behavioural agents / Raphaël Lardeux.

Format:

Book

Author/Creator:

Lardeux, Raphaël, author.

Series:

Elements in Behavioural and Experimental Economics Series

Cambridge elements. Elements in behavioural and experimental economics 2634-1824

Language:

English

Subjects (All):

Economics--Psychological aspects.

Economics.

Finance, Public.

Consumer behavior.

Physical Description:

1 online resource (78 pages) : digital, PDF file(s).

Edition:

First edition.

Place of Publication:

Cambridge, United Kingdom ; New York, NY : Cambridge University Press, 2022.

Summary:

Recent developments in behavioural economics have deeply influenced the way governments design public policies. They give citizens access to online simulators to cope with tax and benefits systems and increasingly rely on nudges to guide individual decisions. The recent surge of interest in Behavioural Public Finance is grounded on the conviction that a better understanding of individual behaviours could improve predictions of tax revenue and help design better-suited incentives to save for retirement, search for a new job, go to school or seek medical attention. Through a presentation of the most recent developments in Behavioural Public Finance, this Element discusses the way Behavioural Economics has improved our understanding of fiscal policies.

Contents:

Cover

Title page

Copyright page

Public Finance with Behavioural Agents

Contents

1 Introduction

2 Behavioural Responses in Public Finance

2.1 The Mirrlees Model of Optimal Income Taxation

2.2 The Sufficient Statistics Approach to Optimal Fiscal Policies

2.2.1 Optimal Direct Income Taxation

2.2.2 Optimal indirect taxation

2.2.3 Social Insurance

2.3 Connecting Theory to Data

3 Public Transfers with Behavioural Agents

3.1 Standard Versus Behavioural Agents

3.1.1 Psychological Deviations

3.1.2 Decision or Experienced Utility?

3.1.3 Perception of the Economic Environment

Salience

Complexity

3.2 Behavioural Models to Rationalise Individual Responses to Fiscal Policies

3.2.1 Notations

3.2.2 Behavioural Taxation

Income Tax

Sales Taxes

3.2.3 Unemployment Insurance and Job Search Behaviour

3.2.4 Selection into Health Insurance Programmes

3.3 Do We Need to Specify Behavioural Biases?

3.3.1 When is a Behavioural Model Really Needed?

3.3.2 Behavioural Sufficient Statistics

4 From Theory to Empirics: Recovering Behavioural Deviations

4.1 Identification of Behavioural Deviations

4.1.1 A First Look at Identification: Graphic Evidence

4.1.2 Thinking Ahead About Observational Requirements

Choices under Different Frames

Taking Advantage of Intra-Individual Variations

Laying Outside the Identification Domain

Looking for Mistakes

4.1.3 Pitfalls of Identification and How to Prevent Them

Alternative Non-Behavioural Explanations

Behavioural Bias or Lack of Information?

4.2 Which Data?

4.2.1 Experiments in Public Finance

Lab Experiments

Field Experiments

Lab-in-the-Field Experiments

4.2.2 Administrative Data and Natural Experiments

4.2.3 Surveys

4.2.4 Using Multiple Sources of Information

4.3 Estimation of Behavioural Models.

4.3.1 Structural Estimation Fosters Extrapolation

Taking Advantage of Our Model: Internal Validation

Taking Advantage of Our Model: Validation in Prediction

Taking Advantage of the Literature in Behavioural Economics: External Validity

Application: DellaVigna, Lindner, Reizer and Schmieder (2017)

4.3.2 Reduced-Form Estimation of Sufficient Statistics

Sufficient Statistics

Causal Framework

Difference-in-differences

Regression Discontinuity Design

4.3.3 Application: Allcott and Taubinsky (2015)

5 Conclusion: Policies Targeting Behavioural Agents

5.1 Which Policy Should the Social Planner Promote?

5.1.1 Normal or Biased Behaviour?

5.1.2 Optimal Policy for Behavioural Agents

5.2 Heterogeneous Behavioural Deviations

5.2.1 Combinations

5.2.2 Dispersion

5.2.3 Awareness

5.3 Standard or Behavioural Instruments?

5.3.1 Nudges as Fiscal Instruments

5.3.2 A Behavioural View of the Public Sector

References.

Notes:

Title from publisher's bibliographic system (viewed on 01 Dec 2022).

Includes bibliographical references.

ISBN:

9781009034715

1009034715

9781009034517

1009034510

9781009029087

1009029088