util_equalizer {bunchr}

Calculating distance between utility at tangency and at notch/kink point

Description

Ability (n) and elasticity (e) determine an agent's earnings and utility. This function determines the tangency point of the agent's utility with the budget line and returns the distance between the utility of earning at that point and the utility of earning at the notch/kink point. This function is mostly used to find the marginal buncher.

Usage

util_equalizer(n, elas, t1, t2, Tax, zstar)

Arguments

n

Ability of person (earnings with zero tax)

elas

elasticity of earnings w.r.t. net-of-tax rate

t1

Tax rate before notch/kink

t2

Tax rate after notch/kink

Tax

height of notch (zero for pure kink)

zstar

place of notch/kink (critical earning point)

Value

Absolute value of utility at tangency minus utility at kink/notch point.

See Also

util_calc

Examples

util_equalizer(1200,0.2,0.1,0.3,100,1000)