Optimal fiscal regime in a spatial duopoly
Article Abstract:
An investigation was conducted to find out how firms' profit performance and social welfare in a horizontally differentiated duopoly are influenced by policy instruments that exclusively affect the location of firms without having a direct impact on their market behavior. In the horizontally differentiated duopoly, a public authority has the power to tax or subsidize firms to compel duopolists to select the socially optimal locations. Regulators were recommended to employ a linear and a quadratic policy that can take the form of taxation or subsidization based on the sign and size of of a lump-sum transfer between firms and the government. Analysis revealed that regulators can pick from among different selections allowing them to optimize social welfare. The proposed policy was also found to be a good alternative to direct government intervention via the nationalization of at least a single firm.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 1997
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Homeownership and investment in risky assets
Article Abstract:
The effects of risks associated with homeownership on the choice of financial asset were investigated. A regression model was utilized to analyze data from the 1989 Survey of Consumer Finances and test whether committed expenditures related to homeownership cause households to hold their financial assets in a safer form. Results showed that households with a higher committed expenditure uncertainty, represented by mortgage-payment-to-income ratios, hold a smaller part of their financial assets in risky form and that the rent-to-income ratio is not a significant determinant of the risky asset share. On the other hand, households are more conservative in investing their financial assets when they hold highly non-diversified investment portfolios and face large committed expenditures as a result of their mortgage.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 1998
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Terrorism insurance subsidies and social welfare
Article Abstract:
Effects of terrorism risk on building construction suggest that subsidy of terrorism insurance can increase social welfare. Suggestion that such a subsidy program should cover a fixed level of risk per location is highlighted.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 2003
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