Topics in Applied Public Economics
MA Seminar – Winter Term 2012/13
Prof. Dr. Christian Traxler (Chair of Public Economics)
Focus. The aim of this course is to read, understand, and discuss research papers in the
field of Public Economics. We will cover two strands of literature: (1) studies on cheating,
tax evasion and tax enforcement; (2) studies on ‘bunching’ as a response to tax (and non-tax)
incentives. In terms of methods, the seminar’s focus is on applied, empirical contributions.
Organization. The course will take place in blocked format, on January 27 – 31, 2013
at the Haus Kleinwalsertal in Hirschegg/Kleinwalsertal. This is a skiing resort in the
Alps, roughly 500km south of Marburg. The idea is to combine an intensive seminar with a
joint skiing trip. (The seminar is of course open to non-skiers and those with little skiingexperience.)
Course structure. The course is mainly targeted to students in the MSc Programme in
Economics and Institutions. IDS students are welcome, too. The seminar can be credited
as a seminar on Institutional Economics or on Economic Policy (6 ECTS). Students are
expected to be trained in empirical methods (Microeconometrics and/or Empirical Macro)
and should have a basic knowledge of Microeconomics. Knowledge/experience on Skiing is
not necessary;-)
We will cover 15 original research articles, structured along two topics within public economics. The literature list is attached below. Students are required to (a) hand in an essay,
which summarizes the topic of the assigned paper.
(a) The essay should provide more than a simple summary of the paper! You should motivate why this topic is relevant/important, what other studies in this area have done
and what the contribution of the assigned paper is. On top of that you should give a
summary of the paper’s main findings/results and include your own discussion (positive
or negative critique) of the paper.
During the seminar, each student will (b) present this topic (building upon the core paper),
and (c) discuss a second paper.
(b) The presentation should focus on the main results of the paper and how it relates to
the other literature.
(c) The critical discussion of a paper should offer a starting point for a general discussion.
For instance, one can discuss the weakness of a paper or it’s policy implications.
One week after the seminar, students hand in (d) a short research proposal.
(d) The research proposal describes an independent research idea/question and sketches
a research design to address the question.
Grading will be based on (a)–(d) as well as (e) the active participation in the discussions
during the seminar. 50% of the final grade will be based on the written work (a+d), the
remaining 50% on the other parts.
Further details will be discussed at the first meeting on Monday, July 9, 11:00am, AP2 (see
www.uni-marburg.de/fb02/fiwi for further updates).
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Literature
1
Tax Evasion, Tax Enforcement (and Cheating)
1.1 Blumenthal, Marsha, Charles Christian, and Joel Slemrod (2001) ‘Taxpayer Response
to an Increased Probability of Audit: Evidence from a Controlled Experiment in Minnesota’, Journal of Public Economics, 79(3), p. 455-483.
1.2 Kleven, Henrik, Martin Knudsen, Claus Kreiner, Soren Pedersen, and Emanuel Saez
(2011), ‘Unwilling or Unable to Cheat? Evidence from a Tax Audit Experiment in
Denmark’, Econometrica, Vol 79 (3), p. 651-692.
1.3 Dina Pomeranz (2011), ‘No Taxation Without Information: Deterrence and Self-Enforcement
in the Value Added Tax’, Working Paper, Harvard Business School.
1.4 Fellner, Gerlinde, Rupert Sausgruber, and Christian Traxler (2012), ‘Testing Enforcement Strategies in the Field: Threat, Moral Appeal and Social Information,’ Journal
of the European Economic Association, forthcoming.
1.5 Yang, Dean, (2008), ‘Can Enforcement Backfire? Crime Displacement in the Context
of Customs Reform in the Philippines’, Review of Economics and Statistics, 90, p.1-14.
1.6 Yuriy Gorodnichenko, Jorge Martinez-Vazquez, Klara Sabirianova Peter (2009), ‘Myth
and Reality of Flat Tax Reform: Micro Estimates of Tax Evasion Response and Welfare
Effects in Russia’, Journal of Political Economy, vol. 117(3), p 504-554.
1.7 Rincke, Johannes and Christian Traxler (2011), ‘Enforcement Spillovers’, Review of
Economics and Statistics, 93(4), p.1224-1234.
1.8 Zinman, Jonathan and Eric Zitzewitz (2012), Wintertime for Deceptive Advertising?,
Working Paper (January 2012), Dartmouth College.
1.9 Fisman, Ray and Edward Miguel (2007), ‘Corruption, Norms and Legal Enforcement:
Evidence from Diplomatic Parking Tickets’, Journal of Political Economy, 115(6),
p.1020-1048
1.10 Fishman, Ray, Peter Moustakerski and Shang-Jin Wei (2008), ‘Outsourcing Tariff Evasion: A New Explanation for Entrepot Trade’, Review of Economics and Statistics,
90(3), p.587-592.
2
Bunching & Tax Incentives
2.1 Saez, Emmanuel (2010), ‘Do Taxpayers Bunch at Kink Points?’ American Economic
Journal: Economic Policy, vol. 2(3), p. 180-212.
2.2 Chetty, Raj, John N. Friedman, Tore Olsen, and Luigi Pistaferri (2011), ‘Adjustment
Costs, Firm Responses, and Micro vs. Macro Labor Supply Elasticities: Evidence from
Danish Tax Records’, Quarterly Journal of Economics, Vol. 126(2), p. 749-804.
2.3 Sallee, James M. and Joel Slemrod (2010), ‘Car Notches: Strategic Automaker Responses to Fuel Economy Policy’, NBER Working Papers No.16604.
2.4 Kleven, Henrik J. and Mazhar Waseem (2012), ‘Behavioral Responses to Notches: Evidence from Pakistani Tax Records’, Working Paper (April 2012).
2.5 Bastani, Spencer and Hakan Selin (2012), ‘Bunching and Non-Bunching at Kink Points
of the Swedish Tax Schedule’, Working Paper.