Price Isn’t Everything: Behavioral Response Around Changes In Sin Taxes

In traditional economic models, individual utility depends only on absolute consumption. These models lie at the heart of claims that pursuit of individual self-interest promotes aggregate welfare. Recent years have seen renewed interest in economic models in which individual utility depends not only on absolute consumption, but also on relative consumption. In contrast to traditional models, these models identify a fundamental conflict between individual and social welfare. The conflict stems from the fact that concerns about relative consumption are stronger in some domains than in others. The disparity gives rise to expenditure arms races focused on positional goods—those for which relative position matters most. The result is to divert resources from nonpositional goods, causing welfare losses. Compelling theoretical and empirical evidence confirms the importance of relative consumption in individual valuations. In light of this evidence, we must question the wisdom of economic policy recommendations stemming from models that ignore relative consumption.

The traditional economic model create wealth and bring the problems of resources, energy and environment. So we need to change the traditional economic model, realize coupling optimization on industrial system, natural systems and social system by using ecological development model, promote the natural, social and economic coordinated development.

Enlargement of the scope of human activities and the improvement of the ability to transform nature are posing severe challenges to the environmental carrying capacity of the entire planet. Earth's environmental resource systems are facing systemic risks that cannot be evaded. Environmental crises have become a bottleneck restricting economic and social development. Resources are most likely to become the most important strategic resources. The social production methods and operating mechanisms under the traditional economic model are bound to be challenged, as the era of ecological civilization is approaching. On the basis of fully respecting the laws of nature and society, this paper uses mechanism design theory to design environmental resources including environmental coordination and assessment mechanisms, market trading mechanisms, macro-control mechanisms, scientific innovation mechanisms, and innovative talent introduction mechanisms. Conclusions and suggestions are rendered accordingly to use mechanisms to resolve the contradiction between economic development and environmental protection, aiming to coordinate relevant conflicts of interest.

Past research has provided a variety of model approaches which are intended for the use of detecting improprieties in the bidding process for public procurement auctions. Recent literature has moved beyond traditional bid price models and seeks to incorporate various non-price factors, such as vendor utility, into bid rigging modelling efforts. In response, the following research aims to incorporate specific non-price factors such as vendor distance to site, vehicles owned, etc., to demonstrate, while using transaction cost economic (TCE) theory, that these complex price models – hedonic price models – can incorporate non-price factors as a function of vendor price mechanisms. Future implications of hedonic techniques in procurement bidding analysis are also discussed with regard to their potential usefulness for detecting collusive behaviour. Data, which contains both bids accused of collusion and competitive bids, were collected and coded to include variables omitted from other OLS models. The hedonic model tested was found to improve upon modelling capabilities of standard OLS models creating possibilities for more extensive research into detailed price modelling focusing on bidding improprieties.

Public goods provision in an experimental environment

Big data economy meets artificial intelligence, making the traditional statistical economy gradually evolve into an intelligent economy. Limited by human consciousness, traditional economic models have low prediction accuracy. In traditional statistical methods, the limited sample data also makes it impossible to effectively control and comprehensively forecast macroeconomic and development trends. Data economy has fundamentally transformed the traditional means of economic analysis. This is because the digital economy enables economic connectivity and precise data sharing, which can be used for precise economic statistics and mathematical analysis. Meanwhile, in terms of statistical methods, artificial intelligence methods no longer rely on human consciousness, but more objectively pay attention to economic cause and effect and are more accurate and comprehensive. This paper proposes an economic forecasting method based on artificial intelligence methods combined with big data analytics. In our model, we consider the economic statistics, equilibrium, and future prediction with the big data. Through the artificial intelligence method based on deep learning, the possible political factors, human activity factors, and social environmental factors in actual economic activities are effectively combined to form the main analysis subject affecting the economy. The results show that our model can be used as a basic model for economic statistics, economic analysis, economic decision-making, economic self-regulation, and other functions under the current development trend of the data economy.

Recent studies have shown that imitation and adaptation are the dominant mechanisms of a positive feedback loop that leads to a dramatic amplification of stock prices. In this research, relative wealth concerns have been taken into account as the primary origin of the positive feedback effect. Specifically, relative wealth concerns alongside wealth inequality would change the risk attitude of each stock-trading agent to catch up with their peers’ wealth, by imitating and adapting their trading strategies. We simulate an artificial stock market via an agent-based modeling approach, which allows us to observe what happens to each agent’s relationships, providing a more insightful view than the traditional economic model. This research demonstrates how relative wealth concerns can affect today’s financial mechanism, by means of positive feedback effects.

Does consuming more goods make people happier? For a broad spectrum of goods, available evidence suggests that beyond some point the answer is essentially no. Much of this evidence is from the large and growing scientific literature on the determinants of life‐satisfaction and psychological well‐being.1 Evidence from this literature also suggests, however, that there are ways of spending time and money that do have the potential to increase people's satisfaction with their lives, and herein lies a message of considerable importance for policy‐makers. The psychologist's conception of human well‐being is somewhat different from the economist's. Economists speak of an individual's utility, which in traditional economic models is assumed to be an increasing function of present and future consumption of goods, leisure, and other amenities that people typically view as desirable. Faced with a limited income, the individual is assumed to choose among alternatives so as to maximise her utility....

Electronic markets are becoming more and more pervasive but a remaining challenge is to develop user interfaces (UIs) to promote efficient market outcomes. This can be a challenge in markets with a large number of choices, yet traditional economic models do not consider that humans have cognitive costs, bounded time for decision making, and bounded computational resources.KeywordsLoss AversionElectronic MarketMarket GameMarket DesignCognitive CostThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

As the cost of storing, sharing, and analyzing data has decreased, economic activity has become increasingly digital. But while the effects of digital technology and improved digital communication have been explored in a variety of contexts, the impact on economic activity—from consumer and entrepreneurial behavior to the ways in which governments determine policy—is less well understood. Economic Analysis of the Digital Economy explores the economic impact of digitization, with each chapter identifying a promising new area of research. The Internet is one of the key drivers of growth in digital communication, and the first set of chapters discusses basic supply-and-demand factors related to access. Later chapters discuss new opportunities and challenges created by digital technology and describe some of the most pressing policy issues. As digital technologies continue to gain in momentum and importance, it has become clear that digitization has features that do not fit well into traditional economic models. This suggests a need for a better understanding of the impact of digital technology on economic activity, and Economic Analysis of the Digital Economy brings together leading scholars to explore this emerging area of research.

An institutional framework for energy transitions: Lessons from the Nigerian electricity industry history

Traditional models of international trade flows find that prices explain significant growth in export market shares. In the new international trade theory nonprice factors are seen to be of great importance for the explanation of trade. Following Magnier and Toujas-Bernate (Weltwirtschaftliches Archiv., 130, 1994), this study introduces nonprice factors, namely gross fixed investment and technology (number of patents accepted), into the export market share equation. Empirical estimation is carried out on five Asia-Pacific countries for the period 1978 to 1993. Results are similar to those of Magnier and Toujas-Bernate (1994) for the OECD, which show that nonprice factors have played an important role in determining export market share during the last decade.

The responsiveness of motor vehicle death rates of youths aged fifteen through twenty-four to variations in the cost of beers as reflected by differences in State excise tax rates on beer is investigated. Evidence for this age group is provided on the extent to which declining real beer excise taxes have contributed to increases in fatal motor vehicle crashes and on the extent to which increases in real beer taxes can serve as a potent instrument in the antidrinking campaign. The effect of an increase in the legal drinking age on youth motor vehicle deaths is also examined.

Wicked problems in environmental economics refer to complex, multifaceted issues that defy straightforward solutions due to the interplay of social, economic, and environmental factors. These problems are often characterized by uncertainty, competing values, and dynamic conditions, making them challenging to address through traditional economic models or policy approaches. One of the key characteristics of wicked problems is that they lack a clear, definitive solution. Unlike “tame” problems, where outcomes can be predicted and optimized, wicked problems involve multiple stakeholders with diverse interests and values. For example, climate change, biodiversity loss, and water resource management are all wicked problems because they affect various sectors—agriculture, energy, and ecosystems—each with their own priorities. What benefits one group may harm another, creating conflicts over the best course of action. Another complicating factor is the high level of uncertainty associated with wicked problems. Scientific data and economic models can help predict potential outcomes, but they often cannot capture the full scope of these issues, especially when considering long-term environmental impacts. In environmental economics, this uncertainty is exacerbated by the interdependence of ecological systems and human activities. Wicked problems are also dynamic, meaning they evolve over time as new information becomes available and as social, economic, and environmental conditions change. Finally, the resolution of wicked problems often involves trade-offs between competing goals, such as economic growth and environmental protection. These trade-offs are inherently political, as different stakeholders—governments, industries, communities, and advocacy groups—often have divergent views on what should be prioritized. This complicates the policy process, requiring negotiation and collaboration across sectors.

This article explores the emerging field of Behavioral Macroeconomics, which seeks to integrate insights from psychology into traditional economic models. The intersection of behavioral science and macroeconomics opens new avenues for understanding economic phenomena by incorporating human behavior, emotions, and cognitive biases into the analysis. We examine key principles, methodologies, and challenges in this interdisciplinary approach, emphasizing the potential implications for policy-making and the broader understanding of economic dynamics.