notch_equation {bunching} | R Documentation |

## Notch Equation

### Description

Defines indifference condition based on parametric utility function in notch setting. Used to parametrically solve for elasticity.

### Usage

```
notch_equation(e, t0, t1, zstar, dzstar)
```

### Arguments

`e` |
elasticity. |

`t0` |
numeric value setting the marginal (average) tax rate below zstar in a kink (notch) setting. |

`t1` |
numeric value setting the marginal (average) tax rate above zstar in a kink (notch) setting. |

`zstar` |
a numeric value for the the bunching point. |

`dzstar` |
The distance of the marginal buncher from zstar. |

### Value

`util_diff`

returns the difference in utility between zstar and z_I in notch setting.

### See Also

### Examples

```
notch_equation(e = .04, t0 = 0, t1 = .2, zstar = 10000, dzstar = 50)
```

[Package

*bunching*version 0.8.6 Index]