Bling bling taxation and the fiscal virtues of hip hop

The article extends Ng’s (Am Econ Rev 77(1):186–191, 1987) model of optimal taxation of diamond goods—goods that are valued solely for their costliness. We extend his findings by analyzing how other goods should be taxed in the presence of pure diamond goods; modified Ramsey rules are derived in a basic single-type model as well as in a two-type model with redistribution. One key finding, that may be surprising and rather provoking, is that close complements (hip hop music) to diamond goods (bling bling) should be heavily subsidized.     

Time series count data regression

The count data model studied in the paper extends the Poisson model by al-lowing for overdispersion and serial correlation. Alternative approaches to esti-mate nuisance parameters, required for the correction of the Poisson maximum likelihood covariance matrix estimator and for a quasi-likelihood estimator, are studied. The estimators are evaluated by finite sample Monte Carlo experi-mentation. It is found that the Poisson maximum likelihood estimator with corrected covariance matrix estimators provide reliable inferences for longer time series. Overdispersion test statistics are wellbehaved, while conventional portmanteau statistics for white noise have too large sizes. Two empirical illustrations are included.     

Ill health and social conditions amongst migrants and refugees—the case of Sweden

The present article delineates the state of health and socioeconomic situation of migrants and refugees in Sweden. Special attention is given to refugees. Migrants appear to have more extensive health problems and a shorter longevity span than native Swedes. The refugees constitute an especially exposed group of migrants. Experiences in the home country that relate to organised violence is a specific problem for this group. It has been estimated that 20 to 25 per cent of all adult refugees who have arrived to Sweden during the recent years have experienced torture in their native countries. Swedish migrant and refugee policy operates according to a model of decentralisation, aiming to avoid ethnic segregation in the big city areas. However, the integration policy seems, in many instances, to have had a negative affect on the situation of the refugees. During the period of time, in which the refugees wait for a residence permit, they are not permitted to work. The long period of forced inactivity—in some instances up to a couple of years—seems frequently to have aggravated the health of the refugees. In addition it appears to contribute to the ever increasing animosity towards them.     

Temptation and Taxation

We study optimal taxation when consumers have temptation and self‐control problems. Embedding the class of preferences developed by Gul and Pesendorfer into a standard macroeconomic setting, we first prove, in a two‐period model, that the optimal policy is to subsidize savings when consumers are tempted by “excessive” impatience. The savings subsidy improves welfare because it makes succumbing to temptation less attractive. We then study an economy with a long but finite horizon which nests, as a special case, the Phelps–Pollak–Laibson multiple‐selves model (thereby providing guidance on how to evaluate welfare in this model). We prove that when period utility is logarithmic, the optimal savings subsidies increase over time for any finite horizon. Moreover, as the horizon grows large, the optimal policy prescribes a constant subsidy, in contrast to the well known Chamley–Judd result.     

THE REPLACEMENT PROBLEM IN FRICTIONAL ECONOMIES: A NEAR‐EQUIVALENCE RESULT

We examine how technological change affects wage inequality and unemployment in a calibrated model of matching frictions in the labor market. We distinguish between two polar cases studied in the literature: a “creative destruction” economy, where new machines enter chiefly through new matches and an “upgrading” economy, where machines in existing matches are replaced by new machines. Our main results are: (i) these two economies produce very similar quantitative outcomes, and (ii) the total amount of wage inequality generated by frictions is very small. We explain these findings in light of the fact that, in the model calibrated to the US economy, both unemployment and vacancy durations are very short, i.e., the matching frictions are quantitatively minor. Hence, the equilibrium allocations of the model are remarkably close to those of a frictionless version of our economy where firms are indifferent between upgrading and creative destruction, and where every worker is paid the same market‐clearing wage. These results are robust to the inclusion of machine‐specific or match‐specific heterogeneity into the benchmark model. (JEL: J41, J64, O33)     

Matched survival data in a co-twin control design

When using the co-twin control design for analysis of event times, one needs a model to address the possible within-pair association. One such model is the shared frailty model in which the random frailty variable creates the desired within-pair association. Standard inference for this model requires independence between the random effect and the covariates. We study how violations of this assumption affect inference for the regression coefficients and conclude that substantial bias may occur. We propose an alternative way of making inference for the regression parameters by using a fixed-effects models for survival in matched pairs. Fitting this model to data generated from the frailty model provides consistent and asymptotically normal estimates of regression coefficients, no matter whether the independence assumption is met.     

Decision‐making in child welfare services: Professional discretion versus standardized templates

The article explores differences in the assessment and decision‐making processes, in child welfare services where a standardized template is implemented and in services where it is not. Child welfare services in several countries use different approaches to assess children's and families' need for intervention. In Norway, as in other European countries, there is a shortage of knowledge about decision‐making strategies. The article examines how 36 child welfare caseworkers in 6 different teams in Norway investigate, assess, and make decisions at the phase of an incoming referral. The analysed data were collected by focus group interviews. We use decision theory as a theoretical frame of reference. The analysis shows variation in the assessment procedure at different points of the process, depending on which approach was used. Despite such differences, the final decisions made were almost identical. Even though the data has its limitations because of the small number of informants, the results indicate that choice of approach is not decisive for decision‐making in the child welfare services.