Author
Russell D. Roberts
Bio: Russell D. Roberts is an academic researcher from Washington University in St. Louis. The author has contributed to research in topics: Public good & Public finance. The author has an hindex of 9, co-authored 15 publications receiving 879 citations.
Topics: Public good, Public finance, Direct tax, Prosperity, Tax rate
Papers
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TL;DR: In this paper, the authors explore a model where private charity and public transfers are determined simultaneously, and they provide evidence that this phenomenon of zero private charity began in the 1930s, the beginning of federal intervention in the charity market.
Abstract: This paper explores a model where private charity and public transfers are determined simultaneously. In political equilibrium, the government "overprovides" public transfers, transferring more to the poor than altruistic taxpayers prefer. At this equilibrium, private charity is zero. Evidence for this result is found by examining various types of data from the 1920s to the present. While private charity currently exceeds $50 billion, very little of it goes to the poor. I provide evidence that this phenomenon of zero private charity began, as the model predicts, in the 1930s, the beginning of federal intervention in the charity market.
543 citations
TL;DR: In this article, the relative efficiency and distributional consequences of the two methods of public goods can be financed by direct taxation or a subsidy to private spending, and the authors examined the relative cost and efficiency of both methods and showed that when this trade-off is dollar for dollar, a subsidy is always more efficient than direct taxation.
Abstract: Public goods can be financed by direct taxation or a subsidy to private spending. This paper examines the relative efficiency and distributional consequences of the two methods. Efficiency is shown to depend on the price elasticity of private spending and the trade- off between public and private spending. When this trade-off is dollar for dollar, however, a subsidy is always more efficient than direct taxation. The gains from a subsidy are larger for a mixed good than for a pure public good. Looking a t distributional effects, the author shows when richer taxpayers may prefer a tax credit to deductibility, even though they face lower prices with deductibility, and also shows when richer taxpayers prefer direct taxation to either type of subsidy. Copyright 1987 by University of Chicago Press.
152 citations
TL;DR: In this article, plausible cost-based explanations exist for what are commonly perceived to be cases of price discrimination, such as the price spreads of retail gasoline products, the "high" price of dinners at restaurants, the “high” price of popcorn at movie theaters, and the fact that airline ticket prices vary with how long the ticket is purchased before the flight's departure.
Abstract: This paper demonstrates that plausible cost-based explanations exist for what are commonly perceived to be cases of price discrimination. We explain such commonly discussed problems as the price spreads of retail gasoline products, the “high” price of dinners at restaurants, the “high” price of popcorn at movie theaters, and the fact that airline ticket prices vary with how long the ticket is purchased before the flight's departure. Our explanations benefit from not relying on consumer ignorance or implicit collusion among numerous sellers.
72 citations
TL;DR: In this article, the authors examine how the size of an efficient subsidy varies with the amount of free-riding and the presence of distorting taxation, and derive conditions for efficiency in providing transfer public goods.
Abstract: This paper examines how the size of an efficient subsidy varies with the amount of free-riding and the presence of distorting taxation. Ironically, the existence of free-riding, where some individuals make no voluntary contribution at all, reduces the size of an efficient subsidy and makes a subsidy more attractive compared to direct taxation. For the gain to be significant, the number of donors must be extremely few in number. Even when the gains from a subsidy relative to direct taxation are small, a subsidy may dominate direct taxation because it can reveal an efficient level of the public good. The analysis distinguishes between traditional public goods such as national defense, and what I call transfer public goods, where members of society care about the consumption of a particular group in society such as the poor. I generalize the Samuelson (1954) results to derive conditions for efficiency in providing transfer public goods.
38 citations
TL;DR: In this article, the authors explore the incentives provided by one-sided enforcement and show that one side of the transaction is defined as the "victim" and the other as the ''guilty party''.
Abstract: THERE are two ways to enforce price controls. The first method uses undercover agents to observe violations or to offer to enter into transactions at illegal prices. The second method relies on buyers to provide a public board, staffed by government officials, with the information necessary to detect and punish violations of the law. We show that this second method is effective when one side of the transaction is defined as the \"victim\" and the other as the \"guilty party.\" The guilty party is typically fined an amount equal to the revenue that he gained through violating the law; that amount is then given as compensation to the victim. This method of \"one-sided\" enforcement reduces, ex ante, the guilty party's incentive to violate the law. This article explores the incentives provided by one-sided enforcement. The article makes no judgment on the social desirability of the laws discussed here but explains why the methods of enforcement used by the state are efficient, given the chosen end. One-sided enforcement is particularly effective at enforcing rent control and the minimum wage laws. In 1973, for example, a mere 880
33 citations
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TL;DR: In this paper, the invariance proposition of public goods and the optimal tax treatment of charitable giving are discussed. And the authors show that impure altruism is more consistent with observed patterns of giving than the conventional pure altruism approach, and has policy implications that may differ widely from those of the conventional models.
Abstract: When people make donations to privately provided public goods, such as charity, there may be many factors influencing their decision other than altruism. Social pressure, guilt, sympathy, or simply a desire for a "warm glow" may all be important. This paper considers such impure altruism formally and develops a wide set of implications. In particular, this paper discusses the invariance proposition of public goods, solves for the sufficient conditions for neutrality to hold, examines the optimal tax treatment of charitable giving, and calibrates the model based on econometric studies in order to consider policy experiments. Impure altruism is shown to be more consistent with observed patterns of giving than the conventional pure altruism approach, and to have policy implications that may differ widely from those of the conventional models. Copyright 1990 by Royal Economic Society.
5,139 citations
TL;DR: The authors formally developed a model of giving in which altruism is not "pure." In particular, people are assumed to get a "warm glow" from giving, and this model generates identifiable comparative statics results that show that crowding out of charity is incomplete and that government debt will have Keynesian effects.
Abstract: Models of giving have often been based on altruism. Examples include charity and intergenerational transfers. The literatures on both subjects have centered around neutrality hypotheses: charity is subject to complete crowding out, while intergenerational transfers are subject to Ricardian equivalence. This paper formally develops a model of giving in which altruism is not "pure." In particular, people are assumed to get a "warm glow" from giving. Contrary to the previous literature, this model generates identifiable comparative statics results that show that crowding out of charity is incomplete and that government debt will have Keynesian effects.
3,028 citations
TL;DR: In this article, the authors consider a general model of non-cooperative provision of a public good and show that there is always a unique Nash equilibrium in the model and characterize the properties and the comparative statics of the equilibrium.
2,237 citations
TL;DR: This paper found that the majority of private income transfers occur inter vivos (i.e., between living persons), but very little is known about this type of transfer behavior, and two motives are considered: altruism and exchange.
Abstract: Private income transfers are becoming increasingly recognized as a key aspect of the U.S. economy. The majority of private income transfers occur inter vivos (i.e., between living persons), but very little is known about this type of transfer behavior. This paper tests alternative hypotheses concerning motivation for inter vivos transfers. Two motives are considered: altruism and exchange. Evidence presented here casts doubt on the altruistic model of transfer behavior. Observed patterns for inter vivos transfers are more consistent with exchange-related motives. This finding has important implications for the effects of public transfer programs on the distribution of economic well-being.
1,245 citations
TL;DR: In particular, as the size of the economy grows, the fraction contributing to the public good diminishes to zero as mentioned in this paper, which leads to a very limited model with little, if any, predictive power.
876 citations