ECOS3997 Interdisciplinary Project in Economics Assignment: Written Report University of Sydney 1 Assessment: Written Report • Written report (60%) Due: Friday 22 October (Week 10) 3000 words maximum (excluding references) ∗ Format: double spaced, 12 point font and 1 inch margins ∗ Figures and tables count toward the word limit based on space they take up (i.e. one page of text ~500 words, so 1 page of figures/tables = 500 words). Do not make figures and tables small to get around this. Online submission: similarity checking via TurnitIn. 2 Written Report: Brief Brief: Write a report for the federal government comparing the level of inequality in Australia with other countries and over time. Identify at least one area of government policy that affects the level of inequality and describe alternative policy options available to the government. 3 Written Report • You will be assessed on your ability to articulate empirical and quantitative analysis in the applied context of eco- nomic inequality. • You will be assessed on your written communication. • You will not be able to write this the night before submis- sion. Good writing is a skill and takes time. Leave time to edit and refine your documents. 4 Suggested Structure of the Report 1. Introduction and background (approx. 400 words). 2. Compare the level of inequality in Australia with other countries and over time (approx. 1250 words). 3. Describe the effect of a government policy that may affect inequality and describe alternative policy options available to the government (approx. 750 words). 4. Discussion and recommendations (approx. 400 words). 5. Conclusions (approx. 200 words). 6. References 5 #1: Introduction • Succinctly describe the purpose of your report • Why should we care about inequality? Possible reasons include: How the benefits of growth are distributed through the economy. The Social Welfare Function we studied in Topic 3 formalises this. Relationship between inequality and economic opportu- nity and mobility (see Topic 4) • Summarise your main findings. 6 #2: Trends in Inequality In this section of your report, you should think carefully about: Measurement: What are the pros and cons of measuring in- equality using income, consumption and wealth data? What different insights do we get from each? What does the ev- idence show? You might also want to discuss poverty and economic (dis)advantage. By how much does the tax and transfer system reduce inequality? Data sources: What different sources of data can be used to measure inequality? What are the advantages and limitations of each, and how does this affect your conclusions? Statistical measures: Do alternative statistical measures lead you to different conclusions? Recall also our discussion of 7 equivalisation, imputed rent, and how these adjustments can affect measurement of inequality. Economic mobility: How is life-course mobility related to in- equality? What is the relationship between inequality and intergenerational mobility? Is intergenerational mobility the same regardless of where you live in Australia? References: The main lecture references for this section of your paper are likely to be Topics 1, 2, 4 and 5. You should also consult the main papers from those lectures, which are available on e-Reserve. The exercises in Tutorials 1 and 2 should be helpful in presenting, interpreting and choosing be- tween inequality measures. #3: Policy Options In this section of your report, you should choose one (or two) areas of government policy that affect the level of inequality and outline policy options available to government. In class, we spent the most time discussing top (labour and capital) income taxation (Topics 3 & 5 and Tutorials 3 & 5). We also discussed the relationship between returns to educa- tion and inequality (Topic 4 and Tutorial 4). You have freedom to choose other aspects of government policy, in which case you will be responsible for finding the required references. To make things concrete, supposing you choose top income taxation as the policy to analyse, some of the main issues you might want to discuss are: 8 Conceptual: What theoretical considerations determine opti- mal top income taxation? What are the key parameters deter- mining the optimal top income tax rate? How does the level of inequality affect the optimal top income tax rate? Empirical: Provide a menu of alternative top marginal in- come tax rates under different parameter values, justifying your choices. Explain the key uncertainties and how they af- fect your conclusions. What is the cross-country relationship between inequality, top income tax rates and economic growth, and what are the im- plications for top income taxation? Do you find the cross- country evidence convincing enough to guide government pol- icy? Key references: Topics 3 & 5, Tutorials 3 & 5 and key papers from those lectures on the reading list. #4: Discussion and Recommendations In this section you will want to provide a discussion of your analysis in Section #3 and provide policy recommendations to government. Things you might want to discuss include: • What are the costs and benefits of inequality? (We dis- cussed aspects of this in the context of returns to educa- tion.) • What does the public know about the level of inequality, and how does this affect support for redistribution? (Topic 6) • If you discussed optimal income taxation in Section #3 then this would be a good place to discuss evidence on 9 popular support for the optimal income taxation framework (see Topic 3), and the implications for setting government policy based on the optimal taxation framework. • What are the key uncertainties, and how do they affect your recommendations? • Acknowledge alternatives to your recommendations and explain why different people may reach alternative views based on positive and normative criteria. The guest lec- tures in Weeks 6 and 7 will help here. General Points Audience: This is a report for government, so do not present regressions or equations and avoid jargon. Your reader is a smart non-economist. The Productivity Commission report is a good example of the style of writing to aim for. Data: You should critically analyse and distill the information from lectures and the key papers on the reading list. But you should also present your own analysis. The following websites contain information you may find useful for your analysis: • The World Wealth and Income Database:
(web) • OECD Income Distribution Database: 10
(web) • Chartbook of Economics Inequality (Atkinson and Morelli): (web) • All the Ginis database (World Bank): (web) • Luxembourg Income Study (LIS): (web) Analysis and presentation of data: Present data that make your key points in easy to read graphs and tables. The Pro- ductivity Report is a good example of how to present data graphically. Try to label your graphs and tables so they can be interpreted on their own. Use the text to analyse your graphs and tables rather than just state what they show. Decide on your main points and then choose the data to make those points, justifying your choices clearly and succinctly. Do not bombard the reader with endless graphs and tables. For example, a carefully chosen 4 Figures and 2 Tables could be sufficient. Scope: You do not need to cover everything we discussed in lectures to write an excellent report. You should focus on pulling out the information you need and finding connections between the topics and concepts we discussed. Organisation: You are free to structure your own report. What I've sketched above is just one possibility, drawing out (some) connections between the material we discussed in lectures. Different research question: You are welcome to modify the policy brief, but you must email me first to discuss. In this case, you will be responsible for any required additional re- search beyond the reading list. 欢迎咨询51作业君
