NBER Working Papers and Publications
|July 1992||Robin-Hooding Rents: Exploiting the Pecuniary Effects of In-Kind Programs|
with Richard Zeckhauser, Steve Coate: w4125
The pecuniary effects of cash and in-kind programs differ. A program that builds housing for the poor, for example, is likely to result in a lower price of existing low-income housing than would an equally costly cash transfer program. Low-income renters in general would benefit; landlords would lose. The process we label Robin-Hooding rents employs in-kind programs to transfer rents from one group in society to another, Direct taxation of "donor" groups may be infeasible because their incomes can't be monitored, they are engaged in illegal activities, they are foreign, or the government's administrative apparatus is ineffective. A general equilibrium analysis reveals that absent the ability to target taxation, Robin-Hooding may be a valuable second-best transfer instrument. Robin-Hooding ...
|March 1987||Can People Compute? An Experimental Test of the Life Cycle Consumption Model|
with Laurence J. Kotlikoff, William Samuelson: w2183
This paper presents the results of an experimental study of the life cycle model in which subjects were asked to make preferred consumption choices under hypothetical life cycle economic conditions. The questions in the experiment are designed to test the model's assumption of rational choice and to elicit information about preferences. The subjects' responses suggest a widespread inability to make coherent and consistent consumption decisions. Errors in consumption decision-making appear to be very substantial and, in many cases, systematic. In addition, the experiment's data strongly reject the standard homothetic, time-separable life cycle model. The principal specific findings of the laboratory experiment are: (1) Subjects displayed significant inconsistencies in their consumption deci...
Published: Kotlikoff, Laurence J. (ed.) Essays on Saving, Bequests, Altruism, and Life-Cycle Planning. MIT Press, 2001.