Tuesday, April 17, 2007

Tax All Those Tall People!

Greg Mankiw wrote:

"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."

Read more here.

Arnold Kling at Econlog questioned Greg's use of Instrumental Variable in the latter's paper. And BTW, do read BOTH of his comments, (another, more recent one could be found here) they are some of the best, intuitive explanations that I have encounterd on the concept of Instrumental Variable.

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