Extreme localism: local taxes and tax competition

Posted by Dr. Teemu Lyytikäinen, SERC The government’s consultation on Local Government Finance leaves many details still to be determined. But there is one thing the document is very clear on: the government has no intention of allowing councils to set their own business tax rates. Why might that be

Costs and Benefits of Two Alternative Salmonella Control Policies in Finnish Broiler Production

In this study, costs and benefits of two Salmonella control options in broiler production were compared. The first option was to control Salmonella as set by Council Directive 92/117/EEC, so-called Zoonosis Directive. The second option was more intense control programme, the so-called Finnish Salmonella control programme. The costs of controlling Salmonella in primary and secondary production and the direct and indirect losses due to Salmonella infection in humans in both options were compared. The national control option was found to be economically feasible. One prevented loss of life covered all the control costs of the national programme.Salmonella, broiler, cost-benefit, control, Food Consumption/Nutrition/Food Safety,

Transfer taxes and household mobility: distortion on the housing or labour market

We estimate the effect of the UK Stamp Duty Land Tax (SDLT) – a transfer tax on the purchase price of property or land – on different types of household mobility using micro data. Exploiting a discontinuity in the tax schedule, we isolate the impact of the tax from other determinants of mobility. We compare homeowners with self-assessed house values on either sides of a cut-off value where the tax rate jumps from 1 to 3 percent. We find that a higher SDLT has a strong negative impact on housing-related and short distance moves but does not adversely affect job-induced or long distance mobility. our results suggest that transfer taxes may mainly distort housing rather than labor markets

Market implications of FMD epidemics in the Finnish pig sector: Does market structure matter?

This paper examines the role of market coordination and market distortions caused by a hypothetical FMD outbreak in the Finnish pig sector. By using stochastic dynamic programming, it simulates the consequences of two outbreak scenarios (large vs. small) under two distinct market regimes (competitive market vs. monopoly in the domestic supply). Simulated losses depend on the magnitude of outbreak and expected duration of possible turndown of meat exports, whereas market regime has a limited impact.Foreign trade, livestock epidemics, dynamic programming, Livestock Production/Industries,

Housing allowance and rents: evidence from a Stepwise Subsidy Scheme

This paper studies the effect of housing demand subsidies on rents using discontinuities in the Finnish housing allowance system as a quasi-experimental setting. The stepwise dependence of housing allowance on the floor area of the dwelling and the year of construction of the building causes economically and statistically significant discontinuities in the amount of housing allowances. However, our results show that there are no discontinuities in rents of the recipient households at these cut-offs. Instead, differences in the amount of the housing allowance are translated roughly one-to-one into differences in the rent net of housing allowanc

New road infrastructure: the effects on firms

This paper estimates the impact of new road infrastructure on employment and labour productivity using plant level longitudinal data for Britain. Exposure to transport improvements is measured through changes in accessibility, calculated at a detailed geographical scale from changes in minimum journey times along the road network. These changes are induced by the construction of new road link schemes. We deal with the potential endogeneity of scheme location by identifying the effects of changes in accessibility from variation across small-scale geographical areas close to the scheme. We find substantial positive effects on area level employment and number of plants. In contrast, for existing firms we find negative effects on employment coupled with increases in output per worker and wages. A plausible interpretation is that new transport infrastructure attracts transport intensive firms to an area, but with some cost to employment in existing businesses

The effect of the UK stamp duty land tax on household mobility

We estimate the effect of the UK Stamp Duty Land Tax on household mobility using micro data. Exploiting a discontinuity in the tax schedule as a quasi-experimental setting, we isolate the impact of the stamp duty from other determinants of mobility. Our empirical strategy essentially compares similar households with self-assessed house values on either sides of a cut-off value where the tax rate increases from 1 to 3 percent. We find that a higher stamp duty strongly negatively affects a household’s propensity to move: the 2 percentage-point increase in the stamp duty may reduce mobility of homeowners by around 40 percent. This adverse effect is mainly confined to short-distance and non-job related moves

The effect of surface character on flows in microchannels

A technique for quantifying velocity profiles of fluids flowing in circular microchannels is presented. The primary purpose of this technique is to provide a robust method for quantifying the effect Of Surface character on the bulk fluid behaviour. A laser-scanning confocal microscope has been used to obtain fluorescent particle images from a 1 micron thick plane along the centreline of hydrophobic and hydrophilic glass capillaries. The velocities of fluorescent particles being carried in pressure-driven laminar flow of a Newtonian fluid have been evaluated at the centreplane of 57.5 micron capillaries using a variation of particle tracking velocimetry (PTV). This work aims to clarify inconsistencies in previously reported [1-12] slip velocities observed in water over hydrophobically modified surfaces at micron and submicron lengthscales. A change in the velocity profile is observed for water flowing in hydrophobic capillaries, although the behaviour appears to be a result of an optical distortion at the fluid-wall interface. This may point to previous suggestions of a thin layer of air adsorbing to the surface. Notwithstanding, the results do not confidently suggest evidence of slip of water on hydrophobic surfaces in microchannels

New road infrastructure: the effects on firms

This paper estimates the impact of road improvements on firm employment and productivity using plant level longitudinal data for Britain. Exposure to transport improvements is measured by changes in employment accessibility along the road network. These changes are constructed using data on employment for small geographical units, details of the main road network and of road construction schemes carried out between 1998 and 2007. We deal with the central problem of endogenous scheme placement by using changes due to new road links and exploiting the spatial detail in our data to focus on accessibility changes close to new schemes. We find substantial effects on employment and numbers of plants for small-scale geographical areas (electoral wards), but no employment response at plant level. This suggests that road construction affects firm entry and exit, but not the employment of existing firms. We also find effects on labour productivity and wages at the firm level, although these results are less robust