transitory components of farm income. Off-farm labor supply of both spouses declines in response to increases in permanent farm … income. Farm wives also reduce off-farm labor supply in response to positive transitory farm income shocks. Consequently, one … mechanism farm households use to smooth their goods consumption when facing fluctuating farm income is to modify their …

production. Wedemonstrate that the presence of labor income risk unambiguously isan important determinant of long-run expected …

heterogeneity. Our model allows for four main social insurance programmes. In contrast to simpler models that attribute all income …

-seeking preferences justify heavier taxation of income because this serves to internalise the negative externality that the pursuit of … status imposes on others. In a model where status depends on both income and effort, we show that the optimal corrective tax … function in such a model, and discuss potential implications for optimal income taxation. …