Category: Public Economics

Economic inequality is the unequal distribution of income and opportunity between different groups in society. It is a concern in almost all countries around the world and often people are trapped in poverty with little chance to climb up the social ladder. But, being born into poverty does not automatically mean you stay poor. Education, at…

Poverty is about not having enough money to meet basic needs including food, clothing and shelter. However, poverty is more, much more than just not having enough money. Poverty entails more than the lack of income and productive resources to ensure sustainable livelihoods. Its manifestations include hunger and malnutrition, limited access to education and other basic services,…

The theory of redistribution systems is based on the fact that most social systems, i.e. an environment in which people exist, have the character of a redistribution system – where estates, pensions and resources are being redistributed among individual members of the system. Redistribution of income and wealth is the transfer of income and wealth (including physical…

Public goods theory purports to show why goods with the rigorously defined characteristics of publicness cannot be produced efficiently by the private sector of the economy, creating a market failure which implies a role for government in the production of those goods for which the market fails. Public good, in economics, a product or service that is…

Optimal taxation is the taxation that reflects society’s choices between the rival goals of equality and economic efficiency, the starting point of which is to maximize social welfare. The theory of optimal taxation has tended to recast the existing literature of public finance into the mould of classical welfare economics by emphasising minimisation of dead weight losses…

Tax incidence or incidence of tax is an economic term for understanding the division of a tax burden between stakeholders, such as buyers and sellers or producers and consumers. Tax incidence can also be related to the price elasticity of supply and demand. Tax incidence is the effect a particular tax has on the two parties of…

Public economics is the study of government policy through the lens of economic efficiency and equity. At its most basic level, public economics provides a framework for thinking about whether or not the government should participate in economics markets and to what extent its role should be. Public economics uses the tools of empirical analysis to…