The combination of credit constraints and indivisible consumption goods may induce some risk-averse individuals to gamble to have a chance of crossing a purchasing threshold. One implication of this is that income effects for individuals who choose to gamble are likely to be larger than for the...

In raw data in the UK, the income loss on separation for women who were cohabiting is less than the loss for those who were married. Cohabitees lose less even after matching on observable characteristics including age and children. This difference is not explained by differences in access to...

This paper evaluates a novel form of fiscal stimulus: a temporary cut in the rate of Value Added Tax (VAT). In December 2008, the UK cut the standard rate of VAT by 2.5 percentage points for 13 months in an effort to stimulate spending. We estimate the effect of the cut on prices and spending...

This paper analyses the trade-off between the incentive effects of increased uncertainty and the welfare benefits of risk-sharing in the design of optimal tax schedules. We use numerical methods to characterise the tax schedule and to give comparative static results of changing risk aversion,...