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Previous studies on public policy under relative consumption concerns have ignored the role of leisure comparisons. This paper considers a two-type optimal nonlinear income tax model where people care both about their relative consumption and their relative leisure. Increased consumption...
Persistent link: https://www.econbiz.de/10005771203
Almost all previous studies on public policy under relative consumption concerns have ignored the role of leisure for status comparisons. Inspired by Veblen (1899), this paper considers a two-type optimal income tax model, where people care about their relative consumption, and where the...
Persistent link: https://www.econbiz.de/10008490333
This paper deals with optimal income taxation and relative consumption under a welfarist government that fully respects people’s preferences and a paternalist government that does not share the consumer preference for relative consumption. Consistent with previous findings, relative...
Persistent link: https://www.econbiz.de/10010961526