About the issue
Publications
Partners
September 2018 (published: 27.09.2018)
Number 3(34)
Home > Issue > Transaction costs as a factor reducing the efficiency
of the economy and public welfare
Sosnilo A.I. , Zaitsev I.P.
It's generally recognized, that the public welfare can reach its maximum under certain conditions provided that there is a social balance of the population’s income. The authors thoroughly analyze the process of income redistribution and claim that the classical approach should be complemented by transaction costs which wasn’t accounted for by the classical approach. The authors put forward a theory, which involves calculating the optimal values of the desired parameters. The article analyzes the correlation between GDP and Gini coefficient of different countries. This coefficient was proposed by the Italian statistician and demographer Corrado Gini and demonstrates how much income belongs to particular layers of society. In other words, this indicator shows the degree of social stratification of a particular country. The values range from 0 to 1. The closer the indicator is to 1, the higher the income disparities between the poorest and richest sectors of society. This index complements the indicators of GDP and per capita income, enables us to describe the economic situation of a particular country in a more detailed way. The study applies statistical methods of analysis, and a comparison of statistical indicators. On the basis of the analysis conducted, the authors prove how important to take into account the transaction costs in the tax system in order to reduce the income disparities between the poorest and richest sectors of society.
Read the full article
Keywords: Social stratification, taxation, transactioncosts, public welfare, GDP, Gini index.
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
UDC 336.027
Transaction costs as a factor reducing the efficiency
of the economy and public welfare
It's generally recognized, that the public welfare can reach its maximum under certain conditions provided that there is a social balance of the population’s income. The authors thoroughly analyze the process of income redistribution and claim that the classical approach should be complemented by transaction costs which wasn’t accounted for by the classical approach. The authors put forward a theory, which involves calculating the optimal values of the desired parameters. The article analyzes the correlation between GDP and Gini coefficient of different countries. This coefficient was proposed by the Italian statistician and demographer Corrado Gini and demonstrates how much income belongs to particular layers of society. In other words, this indicator shows the degree of social stratification of a particular country. The values range from 0 to 1. The closer the indicator is to 1, the higher the income disparities between the poorest and richest sectors of society. This index complements the indicators of GDP and per capita income, enables us to describe the economic situation of a particular country in a more detailed way. The study applies statistical methods of analysis, and a comparison of statistical indicators. On the basis of the analysis conducted, the authors prove how important to take into account the transaction costs in the tax system in order to reduce the income disparities between the poorest and richest sectors of society.
Read the full article
Keywords: Social stratification, taxation, transactioncosts, public welfare, GDP, Gini index.
DOI 10.17586/2310-1172-2018-11-3-53-60