Public Finance, 2nd Edition

sorting of functions, 833±835

allocational functions, 835±841

distribution function, 841±853

Tiebout hypothesis and eYciency

housing market, 866±873

modeling dimensions, 856±859

McGuire model, 859±866

overview, 855±856

Stiglitz model, 874±880

Fiscal illusion, Xypaper eVect, 924

Flypaper eVect, grants-in-aid

combined grant and tax eVects, 924±925

empirical analysis, 920±924

Wscal illusion, 924

Foldes±Rees analysis, uncertainty, 766±768

Free-rider problem

Wrst-best theory of taxation, 322±324

nonexclusive goods

experiments, 187±189

motivations, 189±191

positive versus negative framing, 191±193

Samuelson model, 171±172

Fullerton±Rogers incidence model, lifetime

CGE, 619±621

General equilibrium price models

production technology, 401±402

tax distortions, 402

General taxes, equivalence

basic theorem, 541±545

overview, 540±541

Gibbard±Satterthwaite theorem, social

welfare function, 93±96

Gini coeYcients, Lorenz±Gini tax incidence,

598

Grants-in-aid

bureaucrats, 925±928

Wrst-best policy environment, 893±894

Xypaper eVect

combined grant and tax eVects, 924±925

empirical analysis, 920±924

Wscal illusion, 924

LeGrand guidelines

application, 901±903

basic guidelines, 899±900

redistribution via matching grants, 903±905

second-best policy environment, 894±898

Stiglitz model, 879±880

Haig±Simons income

capital gains, 363±364, 370, 372±378

consumption/expenditures alternatives,

344±348

Xawed surrogate measure of utility, 342±343

interpersonal equity conditions, 349±352

overview, 338±339

personal income, 362±363

personal income, tax loopholes, 364±365

tax capitalization and horizontal equity,

365±367

vertical equity and ineYciency, 368±370

real versus nominal income, 341

sources of income, 340

TRA86, 347±348

uses of income, 340

Harberger model of tax incidence, 549±571

heterogeneous consumers, 570±571

oligopoly and corporate income tax,

569±570

opportunity cost of funds, 750±752

tax incidence model, 549±566

geometric-intuitive analysis, 551±554

overview, 549±551

solution commentary, 559±566

variable factor supplies

local property taxes, 568±569

mobile versus immobile factors, 567

overview, 566±567

taxing demand versus supply side,

567±568

HCV, see also Hicks' compensating variation

Hedonic price technique, nonmarketed

beneWts, 791±795

Henry George theorem, Stiglitz model,

875±876

HEV, see also Hicks' equivalent variation

Hicks' compensating variation

decreasing cost production, 292±293

Jorgenson analysis, 125±128

optimal investment rules, 288±289

single price change, 780

subjective,

intangibles, 776±777

tax incidence, 538±539

Hicks' equivalent variation

commodity taxation, 490±491

Jorgenson analysis, 125±131

multiple price change, 784

single price change, 780±781, 783±784

tax incidence, 538±539

Hohaus±Konrad±Thum housing model,

federalism, 869±872

Homogeneity principle, Young's taxation

principles, 358

Homogeneous production function, 304±305

INDEX 937