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The other type is called ex-post heterogeneity which refer to the conflict (of interests) arising due to distributional implications of the public policy. Thus when a public policy has some distributional consequences, representative agents will be in conflict over distribution due to their respective "self interests". Ex-ante heterogeneity is important not only for distributive implications but also for understanding of the political aspects of the representative agents. It is also important in understanding of the time inconsistency problem of the policy process which arises when a policy maker maximizes welfare of a ‘representation agents'. In such situation, agents may, with respect to policy benefits, be identical ex-ante but are not identical ex-post.
Among non-political dimensions, we find markets being driven by heterogeneity but then the effects of heterogeneity are quite different. Further, in multiple agent welfare economics ex-ante and ex-post heterogeneity of agents is central to the analysis of optimal policy. Here it should be understood that welfare economics takes multi agent objective function as given, and weights the importance of heterogeneous agents for social welfare. Here ‘opinions' of different agents are taken as exogenous while determining the policy outcomes. Thus the focus of analysis remains only the calculations of optimal policy given the objective function.
In contrast, in public process, the main focus is often the endogenous determination of the objective which is maximized implicitly. Here weighs of the implied objective function are not exogenous. They are determined by the political process which in turn determines the outcome of the policy.
‘…Policies that promote residential mobility and increase the knowledge of the consumer-voter will improve the allocation of government expenditures in the same sense that mobility
Question 1: (a) Describe and distinguish between the Linear Stages Theory and the Structural Change Models. (b) What are the limitations of each of the above two models.
Part I. We have examined federal public policies in the context of the democratic political system in the US. Types of policy legislation/behavior fall into 3 main types. A
sensors see details and seek detail and precision intuitions see generalities
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According to estimates by Goolsbee and Petrin (2004), the elasticity of demand for basic cable service is ?0.51, and the elasticity of demand for direct broadcast satellites is ?7.
Public Economics can broadly be understood as that Economics which deals withpublic intervention in the economy. Its domain is supposed to encompass rationalefor public interventio
How burden of public debt is transferred to future generations through reduced capital formation?
Are there any current subsidy or welfare issues that are being discussed or addressed in parliament or municipalities?
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