Studies in empirical public economics

Abstract: Essay 1 studies the redistributional effect of commodity taxes. In the recent literature commodity taxes have been shown to be far less regressive in relation to measures of lifetime resources than in relation to annual income. This suggests that commodity taxation might not have the adverse distributive effect previously believed.However, the distinction between regressivity (or progressivity) and redistributive effect is an important one. Using Swedish household data, I find that commodity taxes indeed are significantly less redistributive in relation to consumption than in relation to annual income. Almost all individual taxes are regressive, but only a few are significantly redistributive; the VAT on food and consumer goods, and the energy taxes.Essay 2 analyzes whether households disproportionately burdened by an increased carbon dioxide tax can be compensated by changes in other commodity taxes. This is done by searching for Dalton-improving tax reforms; a method for welfare analysis which requires that only ranking of households rather than cardinal comparisons will have to be made. The data used are Swedish household data. To be able to rank households along three dimensions: total expenditures, household size, and access to public transportation, the method is extended to allow identification of three-dimensional tax reforms. Dalton-improving reforms are found to exist only when households are ranked in two dimensions, i.e. when households are ranked in line with expenditures and size. But if the third-dimension is added, and households with a good access to public transportations not are allowed to gain at the expense of households with a not so good access, no reforms are found.Essay 3 examines whether the choice made by physicians concerning what drug version-tradename or generic-to prescribe is subject to moral hazard. I use a data set containing information on exactly what drug and what version was prescribed at a particular patient visit to the physician. The results indicate that physicians' habits and the tastes acquired by patients are important. But costs also matter. Patients having to pay large sums out-of-pocket are less likely to have trade-name versions prescribed than patients getting most of their costs reimbursed. This indicates moral hazard.