Tag: substitution effect

Posted on

Staycation, staycation, staycation

This podcast is from BBC Radio 4’s Today Programme. It consists of an interview with James Berresford, chief executive of VisitEngland, and Tracy Corrigan, of the Daily Telegraph on the topic of ‘staycations’ – a term used to refer to people holidaying at home rather than going abroad. Staycations are up, but why is this the case; how much have people switched; and is it really a cheaper option?

More people holidaying in England BBC Today Programme (27/8/09)

See also the following articles:
Unemployment Up In Seaside Resorts Despite Era Of The ‘Staycation’ Fresh Business Thinking (22/8/09)
Unemployment up in seaside resorts despite era of the ‘staycation’ TUC (21/8/09)
Haven Holidays sees rise in caravan sales Times Online (26/8/09)
‘Staycation’ Britons reconsider their holiday plans The National (Abu Dhabi) (28/8/09)
Recession-hit Britons abandon foreign holidays in favour of ‘staycations’ Guardian (13/8/09)
Bad weather puts paid to the Great British Staycation Independent on Sunday (22/8/09)

The following are useful sources of evidence:
Visits to the UK up 4 per cent Office for National Statistics News Release (13/8/09)
1.2 Million More Holidays Taken In England As Brits Take Breaks Closer To Home enjoyEngland (7/8/09)
11.9 million Brits to take U.K break this Bank Holiday enjoyEngland (26/8/09)

Questions

  1. What are the determinants of demand for staycations? How have these impacted on the demand for staycations in the UK in summer 2009?
  2. How are the (a) price; (b) income and (c) cross-price elasticities of demand for staycations relevant in determining the demand for staycations?
  3. Why is imperfect information an important problem in making a decision about where to take a holiday and how do risk attitudes affect the decision?
  4. Why has unemployment risen more than the UK national average in many seaside towns?
Posted on

Time for tax reform

There has been much discussion recently on the use of fiscal policy to combat recession. What measures should be used? How effective will they be? How will the resulting large budget deficit be brought back into balance in the future?

But what are the microeconomic implications of all the tax changes? Are the changes fair? What implications do they have for incentives? Perhaps it’s time for a completely fresh look at the structure of our tax system – a system that has been changed piecemeal over the past years to meet short-term macroeconomic and political goals. Can it be redesigned to meet the two microeconomic goals of efficiency and equity? The following article looks at what form a redesigned tax structure might take.

Our tax system is a mess. But Darling has a chance to fix it. (Peter Wilby) Guardian (11/4/09)

Questions

  1. In what ways does the present tax system fail to meet the goals of (a) fairness through redistribution and (b) creating appropriate incentives?
  2. Explain what is meant by “The whole system has been framed by Tory thinking to assist social engineering, Tory style”.
  3. Provide a justification and critique of the reforms proposed in the article.