Non-Economic Activities, Indirect Externalities, and Third-Best Policies

Ng, Yew‐Kwang ‐K

doi:10.1111/j.1467-6435.1975.tb02281.x

Cited by 32 publications

(12 citation statements)

References 11 publications

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“…Thus, the $ M tax may actually worsen the situation, if, for example, X is highly complementary to Y that produces important external economies which, for some reason, cannot be dealt with directly. (On this non‐amenable externality, see Ng ()). A situation where we have knowledge about the characteristics of the goods closely related to X corresponds to our ease of Informational Scarcity.…”

Section: Towards a Third‐best Theorymentioning

confidence: 99%

“…Then the restrictive effect of monopoly may be partially remedied. 6 See Mishan (1962), Green (1961) and Ng (1975).…”

Section: Figurementioning

confidence: 99%

“…2 The term of third best has appeared intermittently in the literature of welfare economies. See, for example, Turvey (1963), Winch (1971) and Ng (1975).…”

mentioning

confidence: 99%

“…best policies are not much different from first-best policies, and certainly not as complicated as second-best policies. I advance a similar (but incomplete) argument with respect to a particular issue in Ng (1975). 3 In this paper, I put the argument in a more general form (Section 2) and aim to give a very loose discussion of a few important factors relevant for third-best policies (Section 3).…”

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confidence: 99%

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Towards a Theory of Third‐Best

2017

Pacific Economic Review

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The theory of second best (Lipsey & Lancaster ) shows that the presence of irremovable distortions renders the second‐best conditions exceedingly complicated; by satisfying some optimality conditions, an improvement is not ensured. However, the complicated second‐best rules are neither optimal nor feasible if informational and administrative costs are taken into account. The simple first‐best rules are the optimal feasible in an important class of situations (Informational Poverty), implying that analyses based on first‐best assumptions are still relevant for practical policy‐making. This is so because, with a reasonable concavity assumption, staying with the first‐best rules maximises expected benefit. With more (but not perfect) information, third‐best policies are appropriate. Some informal illustrative applications of this third‐best theory are provided. In particular, average‐cost pricing for public utilities may not be far from the third‐best optimum and the necessity to raise government revenue through non‐lump‐sum taxes need not impose any real distortion.

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Section: Towards a Third‐best Theorymentioning

confidence: 99%

“…Then the restrictive effect of monopoly may be partially remedied. 6 See Mishan (1962), Green (1961) and Ng (1975).…”

Section: Figurementioning

confidence: 99%

“…2 The term of third best has appeared intermittently in the literature of welfare economies. See, for example, Turvey (1963), Winch (1971) and Ng (1975).…”

mentioning

confidence: 99%

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confidence: 99%

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Towards a Theory of Third‐Best

2017

Pacific Economic Review

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“…'Relational goods' represent close social relationships. They differ from market goods because they cannot be marketed, because they join individuals together, at least temporarily, and because they must be consumed and produced at the same time (Uhlaner 1989;Gui and Sugden 2005;Ng 1975;Lane 2000;Folbre and Nelson 2000). A solid psychologists' result is that close social relationships are extremely important for people's well-being (Diener et al 1999;Myers and Diener 1995;Lyubomirsky et al, 2005;Baumeister and Leary 1995).…”

Section: The Integrated Explanation Outlined and The Supporting Litementioning

confidence: 99%

The Easterlin paradox and the decline of social capital: An integrated explanation

Pugno

2009

The Journal of Socio-Economics

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During the most recent decades people in industrialised countries have reported both a stagnant or even declining subjective well-being, as Easterlin (1974) originally observed, and deterioration in their social and family bonds, as Putnam (2000) has claimed. The paper proposes an integrated explanation of these two stylised facts by extending the analysis of the relative income explanation of the Easterlin paradox to social relationships as enjoyable ends of choice. Drawing on the evidence-based results of social psychology, the paper constructs a model whose premises are (i) that individuals produce social relationships by means of relational ability, (ii) that this ability is primarily shaped during infancy and remains largely unpredictable, and (iii) that commercial pressure on children to consume in competition with others may displace the enjoyment of social relationships. The model extends microfoundations to encompass new psychological dimensions. It is thus able to merge individuals' idiosyncratic dynamics -which may deteriorate across generations -with improving economic contextual conditions, and to indicate some new priorities in policy options.JEL classification: A12, D01, I31, J22, O40PsychINFO classification: 2840, 2956, 3020, 3211

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The Theory of Nonprofit Organizations Revisited

Ben‐Ner

Gui

2003

Nonprofit and Civil Society Studies

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Non-Economic Activities, Indirect Externalities, and Third-Best Policies

Cited by 32 publications

References 11 publications

Towards a Theory of Third‐Best

Towards a Theory of Third‐Best

The Easterlin paradox and the decline of social capital: An integrated explanation

The Theory of Nonprofit Organizations Revisited

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