Melbourne Institute of Applied Economic and Social Research - Research Publications
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ItemEffects of the Australian new tax system on government expenditure with and without behavioural changes( 2003-04)This paper uses the Melbourne Institute Tax and Transfer Simulator to examine the effects of the New Tax System introduced in Australia in July 2000. First the whole set of changes is studied and then some of its components are discussed separately. From the results it is clear that the change in income tax rates and thresholds had the largest effect, because it affected a large proportion of the population whereas the changes to the benefit system are only relevant to smaller groups. Families with children benefited on average most from the changes, firstly through the changes in income taxes and secondly through the changes in Family Payments. However, families with children were also more likely to experience a loss indicating a wider range of positive and negative outcomes for this group.
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ItemConsumer Sentiment and Australian Consumer Spending( 2000-11)There is a growing literature that seeks to analyse the relationship between consumer sentiment and economic variables, primarily because of the pervasive belief that consumers' opinions and expectations can influence the direction of-or signal changes in the direction of-the economy. There has been little previous empirical work on Australian consumer sentiment, either in determining its explanatory power, or examining the factors that influence consumer sentiment. This research aims to fill part of this gap by providing a clearer understanding of the relationship between consumer attitudes and 'real' economic variables. Specifically, the predictive power of the consumer sentiment index for consumption will be examined using the methods proposed in Carroll, Fuhrer and Wilcox (1994). Private consumption expenditure accounts for a large proportion of GDP; hence, early detection of possible shifts in consumer spending could assist policy makers in smoothing out the business cycle. Our results suggest that the causal relationship between consumption and sentiment in Australia is more complicated than what Carroll et al suggest, and that the behaviour of consumption in Australia looks more like the permanent income hypothesis than it does in the US.
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ItemEstimation of wage equations in Australia: allowing for censored observations of labour supply( 2002-05)This paper presents results for five separately estimated sets of participation and wage equations. The Australian working-age population is divided into sole parents, single men, single women, married men and married women. The approach in this paper takes the censoring of labour supply observations at 50 hours per week into account. The results for the wage equations are as anticipated with education, work experience and age increasing the expected wage. As expected, allowing for the censoring of labour supply reduces the predicted wage levels, particularly for married men who are most likely to work 50 hours or more.