The Policy Elasticity

  title={The Policy Elasticity},
  author={Nathaniel Hendren},
This paper applies basic price theory to study the marginal welfare impact of government policy changes. In contrast to the canonical marginal excess burden framework, the framework presented here does not require a decomposition of behavioral responses to the policy into income and substitution effects. The causal effects of the policy are sufficient. Moreover, in the broad class of models where the government is the only distortion, the causal impact of the behavioral response to the policy… CONTINUE READING


Publications referenced by this paper.

The elasticity of taxable income: Influences on economic efficiency and tax revenues, and implications for tax policy

  • S. H. Giertz
  • A. Viard (Ed.), Tax Policy Lessons from the 2000s…
  • 2009
Highly Influential
7 Excerpts

Chapter 21 taxation and economic efficiency

  • A. J. Auerbach, J. R. Hines
  • Handbook of Public Economics, Volume Volume 3, pp…
  • 2002
Highly Influential
20 Excerpts

Equality and Efficiency

  • A. Okun
  • Brookings Institution Press. 1, 2.3, 4, 51, 4.1…
  • 1975
Highly Influential
8 Excerpts

Similar Papers

Loading similar papers…