Measuring the Full Extent of Fiscal Losses and Gains
Current measures of fiscal impoverishment and gains are not consistent with the law of diminishing returns. This paper proposes new measures of fiscal impoverishment and gains that are consistent with the law of diminishing returns, based on a meth...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/529981560446527788/Measuring-the-Full-Extent-of-Fiscal-Losses-and-Gains http://hdl.handle.net/10986/31876 |
| Summary: | Current measures of fiscal
impoverishment and gains are not consistent with the law of
diminishing returns. This paper proposes new measures of
fiscal impoverishment and gains that are consistent with the
law of diminishing returns, based on a methodology that
gives more significance to greater income gaps, and more
importance to the experience of the poorest individuals
within the fiscal system. The new indicators are
decomposable and cover the incidence, intensity, and
severity of fiscal impoverishment and gains. An empirical
illustration using the 2014 household consumption data
reveals that, overall, in Niger the fiscal system is
improving the welfare of the population: only 33.2 percent
of the population has become poorer due to the fiscal
system, while the remaining 66.8 percent has become richer
because of it. Moreover, the mean relative fiscal loss
(0.014), is 11 percent lower than the mean relative fiscal
gain (0.126). |
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