util_equalizer

Ability (n) and elasticity (e) determine an agent's earnings and utility. This
function determines the tangency point of the agent's utility with the budget
line and returns the distance between the utility of earning at that point
and the utility of earning at the notch/kink point. This function is mostly
used to find the marginal buncher.

View and analyze data where bunching is expected. Estimate counter-
factual distributions. For earnings data, estimate the compensated
elasticity of earnings w.r.t. the net-of-tax rate.

Itai Trilnick

bunchr

Analyze Bunching in a Kink or Notch Setting

util_equalizer function

<dl><dt>n</dt>
<dd>Ability of person (earnings with zero tax)</dd>
<dt>elas</dt>
<dd>elasticity of earnings w.r.t. net-of-tax rate</dd>
<dt>t1</dt>
<dd>Tax rate before notch/kink</dd>
<dt>t2</dt>
<dd>Tax rate after notch/kink</dd>
<dt>Tax</dt>
<dd>height of notch (zero for pure kink)</dd>
<dt>zstar</dt>
<dd>place of notch/kink (critical earning point)</dd></dl>

Arguments

Calculating distance between utility at tangency and at notch/kink point — util_equalizer

<dl>

<dt>n</dt>
<dd>Ability of person (earnings with zero tax)</dd>


<dt>elas</dt>
<dd>elasticity of earnings w.r.t. net-of-tax rate</dd>


<dt>t1</dt>
<dd>Tax rate before notch/kink</dd>


<dt>t2</dt>
<dd>Tax rate after notch/kink</dd>


<dt>Tax</dt>
<dd>height of notch (zero for pure kink)</dd>


<dt>zstar</dt>
<dd>place of notch/kink (critical earning point)</dd>

</dl>

util_equalizer: Calculating distance between utility at tangency and at notch/kink point

Description

Usage

Value

Arguments

See Also

Examples