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We use worldwide satellite data to analyse how population size and density affect urban pollution. We find that density significantly increases pollution exposure. Looking only at urban areas, we find that population size affects exposure more than density. Moreover, the effect is driven mostly by population commuting to core cities rather than the core city population itself. We analyse heterogeneity by geography and income levels. By and large, the influence of population on pollution is greatest in Asia and middle-income countries. A counterfactual simulation shows that PM2.5 exposure would fall by up to 36% and NO2 exposure up to 53% if within countries population size were equalized across all cities., CEPA Discussion Papers; 60

We develop a model of property taxation and characterize equilibria under three alternative taxa-tion regimes often used in the public finance literature: decentralized taxation, centralized taxation, and “rent seeking” regimes. We show that decentralized taxation results in inefficiently high tax rates, whereas centralized taxation yields a common optimal tax rate, and tax rates in the rent-seeking regime can be either inefficiently high or low. We quantify the effects of switching from the observed tax system to the three regimes for Japan and Germany. The decentralized or rent-seeking regime best describes the Japanese tax system, whereas the centralized regime does so for Germany. We also quantify the welfare effects of regime changes., CEPA Discussion Papers; 52

We use a quantitative spatial equilibrium model to evaluate the distributional and welfare impacts of a recent temporary rent control policy in Berlin, Germany. We calibrate the model to key features of Berlin���s housing market, in particular the recent gentrification of inner city locations. As expected, gentrification benefits rich homeowners, while poor renter households lose. Our counterfactual analysis mimicks the rent control policy. We find that this policy reduces welfare for rich and poor households and in fact, the percentage change in welfare is largest for the poorest households. We also study alternative affordable housing policies such as subsidies and re-zoning policies, which are better suited to address the adverse consequences of gentrification., CEPA Discussion Papers; 39

In theory, the incidence of a tax should be independent of which side of the market it is levied on. This principle of liability side equivalence underlies virtually all theories of tax incidence. Policy discussions, however, tend to place great emphasis on the legal division of tax payments. We use computerized experimental posted–offer markets to test liability side equivalence. We find that market outcomes are essentially the same when the tax is levied on sellers as when it is levied on buyers. Prices in both treatments are slightly above the competitive equilibrium. Thus we cannot reject liability side equivalence