Econ talking stuff

Posted on July 24, 2007 by andrewleigh

I’m in Boston this week, attending the National Bureau of Economic Research’s Summer Institute. Thanks to the magic of the internet, you too can see much of what I’m seeing. I’m flitting between theÂ labor studies,Â health economics, tax, and children’s meetings, and am sorry I missed last week’s political economy meetings.

This morning, I went for a long run alongÂ the Charles River. When I look at it,Â I’m often reminded of a comment made byÂ Les Murray when he came to Harvard to speak a few years ago. He said that he spent a week here, and still couldn’t come up with precisely the right word to describe the colour of the river.

2 Responses to Econ talking stuff

Kevin Cox says:

July 24, 2007 at 9:22 am

gunmetal?
Bruce Bradbury says:

July 25, 2007 at 8:58 am

I like the paper by Mankiw and Weinzierl on the ‘Optimal taxation of height’.

Should the income tax system include a tax credit for short taxpayers and a tax surcharge for tall ones? This paper shows that the standard Utilitarian framework for tax policy analysis answers this question in the affirmative. Moreover, based on the empirical distribution of height and wages, the optimal height tax is substantial: a tall person earning $50,000 should pay about $4,500 more in taxes than a short person earning the same income. This result has two possible interpretations. One interpretation is that individual attributes correlated with wages, such as height, should be considered more widely for determining tax liabilities. Alternatively, if policies such as a tax on height are rejected, then the standard Utilitarian framework must in some way fail to capture our intuitive notions of distributive justice.

This is actually a very serious issue for the future, given the likely identification of genetic characteristics that have a much stronger association with income-earning potential than does height.

As a utilitarian (and a man of average height) I’m all in favour of taxes on height.