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Ben Lockwood is an assistant professor of Business Economics and Public Policy at the University of Pennsylvania’s Wharton School. His research specializes in public economics, with a focus on issues of taxation and inequality. He has studied the use of taxes both for redistribution and as an instrument to change behavior. Recent work explores the use of work subsidies such as the Earned Income Tax Credit to accomplish redistribution while encouraging work, and the growing use of soda and sweetened beverage taxes to improve health outcomes. He has also studied the use of income taxes to encourage talented individuals to pursue professions beneficial to society.
Professor Lockwood did his graduate work at Harvard University. His research has been published in the Journal of Political Economy, the Journal of Public Economics, the Journal of Monetary Economics, and the Harvard Business Review.
Hunt Allcott, Benjamin B. Lockwood, Dmitry Taubinsky (Working), Regressive Sin Taxes, with an Application to the Optimal Soda Tax.
Description: Draft coming soon.
Hunt Allcott, Benjamin B. Lockwood, Dmitry Taubinsky (2018), Ramsey Strikes Back: Optimal Commodity Taxes and Redistribution in the Presence of Salience Effects, American Economic Association Papers and Proceedings, 108, pp. 88-92. 10.1257/pandp.20181040
Abstract: An influential result in modern optimal tax theory, the Atkinson and Stiglitz (1976) theorem, holds that for a broad class of utility functions, all redistribution should be carried out through labor income taxation, rather than diﬀerential taxes on commodities or capital. An important requirement for that result is that commodity taxes are known and fully salient when consumers make income-determining choices. This paper allows for the possibility consumers may be inattentive to (or unaware of) some commodity taxes when making choices about income. We show that commodity taxes are useful for redistribution in this setting. In fact, the optimal commodity taxes essentially follow the classic “many person Ramsey rule” (Diamond 1975), scaled by the degree of inattention. As a result, to the extent that commodity taxes are not (fully) salient, goods should be taxed when they are less elastically consumed, and when they are consumed primarily by richer consumers. We extend this result to the setting of corrective taxes, and show how nonsalient corrective taxes should be adjusted for distributional reasons.
Abstract: Taxation affects the allocation of talented individuals across professions by blunting material incentives and thus magnifying nonpecuniary incentives of pursuing a “calling.” Estimates from the literature suggest that high-paying professions have negative externalities, whereas low-paying professions have positive externalities. A calibrated model therefore prescribes negative marginal tax rates on middle-class incomes and positive rates on the rich. The welfare gains from implementing such a policy are small and are dwarfed by the gains from profession-specific taxes and subsidies. These results depend crucially on externality estimates and labor substitution patterns across professions, both of which are very uncertain given existing empirical evidence.
Benjamin B. Lockwood and Matthew Weinzierl (2016), Positive and normative judgments implicit in U.S. tax policy, and the costs of unequal growth and recessions, Journal of Monetary Economics, 77, pp. 30-47.
Benjamin B. Lockwood and Matthew Weinzierl (2015), De Gustibus non est Taxandum: Heterogeneity in preferences and optimal redistribution, Journal of Public Economics, 124, pp. 74-80.
Jonah Rockoff and Benjamin B. Lockwood (2010), Stuck in the Middle: Impacts of Grade Configuration in Public Schools, Journal of Public Economics, 94 (11-12), pp. 1051-1061.
MGEC 611 – Microeconomics for Managers
This course establishes the micro-economic foundations for understanding business decision-making. The course will cover consumer theory and market demand under full information, market equiolibrium and government intervention, production theory and cost optimization, producing in perfectly competitive and monopoly markets, vertical relations, and game theory, including simultaneous, sequential, and infinitely repreated games. Finally, we will wrapup game theory with an application to auctionsn. Students are expected to have mastered these materials before enrolling in the second quarter course: Microechomics for Managers: Advanced Applications.
This course will cover the economic foundations of business strategy and decision-making in market environments with other strategic actors and less than full information, as well as advanced pricing strategies. Topics include oligopoly models of market competition, creation, and protection, sophisticated pricing strategies for consumers with different valuations or consumers who buy multiple units (e.g. price discrimination, bundling, two-part tariffs), strategies for managing risk and making decisions under uncertainty, asymmetric information and its consequences for markets, and finally moral hazard and principle-agent theory with application to incentive contacts.
New Wharton research shows that there could be significant effects from subsidizing professions that offer limited compensation relative to the societal benefits they create.Knowledge @ Wharton - 2018/04/13