The estimation of marginal utility of income for application to agricultural policy analysis

Blue, E. N.; Tweeten, Luther G.

doi:10.1111/j.1574-0862.1997.tb00451.x

Cited by 13 publications

(14 citation statements)

References 6 publications

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“…Furthermore, statistical tests reveal that the tax data, taken at contrasting levels of wage income, offer support for an isoelastic social utility function. Using a different empirical approach, Blue and Tweeten (1997) also found evidence for constancy of e in the case of the USA.…”

Section: The Importance Of E and A Need To Review Existing Empirical mentioning

confidence: 95%

The Elasticity of Marginal Utility of Consumption: Estimates for 20 OECD Countries*

Evans

2005

Fiscal Studies

124

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In social project appraisal, the policy profile of both distributional welfare weights and the social discount rate has risen considerably in recent years. This fact has important implications for the allocation of funds to social projects and policies in countries, and in unions of countries such as the EU. A key component in the formulae for both welfare weights and the social discount rate is the elasticity of marginal utility of consumption, e. A critical review of existing evidence on e suggests that the UK Treasury's preferred value of unity is too low. New evidence presented in this paper, based on the structure of personal income tax rates, suggests that, on average, for developed countries e is close to 1.4. This particular approach to the estimation of e has previously been under‐utilised by researchers.

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Section: The Importance Of E and A Need To Review Existing Empirical mentioning

confidence: 95%

The Elasticity of Marginal Utility of Consumption: Estimates for 20 OECD Countries*

Evans

2005

Fiscal Studies

124

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“…Empirical research lends support to the theoretical shape of this function. For example, in their work on agricultural policy measures aimed at improving the welfare of farmers, Blue and Tweeten (1997), by using data on incomes taken from the US General Social Surveys, construct a quality of life index. This represents a proxy measure for utility, in which income levels turn out to be the most statistically significant variable amongst all the factors considered.…”

Section: A Model For the Social Rate Of Discountmentioning

confidence: 99%

Estimation of a Social Rate of Interest for India

Kula

2004

J Agricultural Economics

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This paper estimates a social discount rate in India for the purpose of economic evaluation of investment projects, such as those aimed at improving the nation's agricultural performance. The component parameters of this rate are: the growth rate of per capita consumption in real terms, the elasticity of the marginal utility of consumption and the mortality‐based discount rate. Based upon time series data, the overall figure turns out to be 5.2 percent. This, it is contended, is reasonable and may be used in cost benefit analysis in that country.

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“…The person has a conventional utility function with a constant elasticity. Empirical work lends support to this type of utility function, Blue and Tweeten (1997), Bradburn and Caplovitz (1965), and Hirshleifer (1980). The net present value of his/her utility will be;…”

Section: Components Of the Time Preference Ratementioning

confidence: 87%

Is Contemporary Interest Rate in Conflict with Islamic Ethics?

Kula

2008

Kyklos

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This paper considers whether the modern interest rate theory is in conflict with Islamic values. Unfortunately, the issue is not sufficiently debated in economic and cognate literature and thus a mist surrounds the Islamic concept of interest (riba) and its use in the Moslem world that contains about 1.3 billion people and hundreds of billions of dollars of surplus funds. A substantial part of this money has not been made available to the commercial banking system as Islamists in particular keep their savings in the form of gold, precious stones or durable foreign currency, in residential or other safe places, believing that earning interest on savings is against the principles of Islam. This attitude by creating a shortage of funds for investment projects is hampering the economic development of many Moslem countries where standards of living are generally low. The finding of the paper is that only one component part of the time preference rate, namely pure time discount, may be objectionable from the Islamic as well as from secular viewpoints; the rest does not appear to be against Muslim ethics. However, a truly competitive financial market structure is likely to wipe away the excessive pure time discount rate leaving the market interest rate free from any objectionable parameter. Copyright 2008 Blackwell Publishing Ltd..

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The estimation of marginal utility of income for application to agricultural policy analysis

Cited by 13 publications

References 6 publications

The Elasticity of Marginal Utility of Consumption: Estimates for 20 OECD Countries*

The Elasticity of Marginal Utility of Consumption: Estimates for 20 OECD Countries*

Estimation of a Social Rate of Interest for India

Is Contemporary Interest Rate in Conflict with Islamic Ethics?

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