PROFIT AND EXPENDITURE FUNCTIONS IN BASIC PUBLIC FINANCE: AN EXPOSITORY NOTE

This paper demonstrates how profit and expenditure functions may be used to prove fundamental results about deadweight losses suffered by consumers, producers, and resource owners. Losses arising from excise taxes and subsidies are examined and, in the case of a tax, the individual level analysis is extended to the market level in a partial equilibrium setting. In addition, profit and expenditure functions are applied to quantity constraints, two-part tariffs, all-or-nothing choices, and reservation prices. Although no new results are derived, the paper provides motivation for the study of indirect objective functions and duality.     

Interests in News and the Knowledge Gap

Although prior evidence identified socioeconomic status as akey factor in the consumption of public affairs news information,equivalent evidence suggests that individual interests in newsevents are related to media consumption and information acquisition.Here, the comparative strengths of these two propositions areanalyzed in the context of the "knowledge gap" hypothesis. Fortwo news events, two-wave data from community samples assessedsocial interest and self-interest in the news, level of education,and knowledge about different aspects of the news events. Interestwas more strongly related to knowledge than education, particularlyfor more complex information. Further, between the two fieldwaves, more new information was learned by those with higherlevels of interest.