Diamonds Are a Government's Best Friend: Burden-Free Taxes on Goods Valued for Their Values: Comments
One of the most startling tax policy prescriptions to appear in recent years is the "diamond good" tax of Yew-Kwang Ng (1987). Diamond goods are goods, such as diamonds, precious stones and metals, expensive fur coats, and luxurious cars, which are valued for their values more than for their intrinsic consumption effects. Consumers of diamond goods are viewed as deriving utility from exhibiting their wealth and/or by using these goods as a store of value and/or giving them as gifts of value. In these cases it is the value of the good that matters most. After analyzing the taxation of diamond goods, Ng formally asserts three propositions and a corollary. His principal findings are that "a change in the price of a diamond good leaves its value and the amounts of all other goods consumed, and hence the utility level of the consumer unaffected" (Proposition 1) and that " the demand curve for a diamond good is a rectangular hyberbola with unit elasticity throughout the whole range where it remains a pure diamond good" (Corollary 1). These findings form the basis for his conclusion that "a pure diamond good has an infinite tax in an optimal tax system" (Proposition 3). The taxation of diamond goods thus represents a burdenless tax policy panacea. The purpose of this paper is to reconsider the microeconomic analysis of the taxation of diamond goods. We show that the striking results of Ng depend on the particular way in which the diamond good is specified. We demonstrate that an alternative-and eminently reasonable -specification yields drastically different results, in that Ng's principal findings do not hold. Ng considers a representative consumer choosing among a single pure diamond good and n -1 ordinary consumption goods. The utility function is assumed to be well behaved and is written
Pricing Superior Goods: Utility Generated by Scarcity
We discuss the pricing of a superior good based on its 'signalling value'. Our model and analysis offer a different explanation of why in China and some other Asian countries the prices of luxury goods are extremely expensive when they are first marketed, then fall dramatically and discontinuously afterwards, when marginal costs decline to below the critical point and the goods become more popular. Copyright 2005 Blackwell Publishing Ltd
Thermally Induced Dynamics of Satellite Solar Panels
Thermally induced structural motions are known to affect the attitude dynamics of low Earth orbiting satellites during eclipse transitions. Motions of e exible appendages such as solar panels lead to rigid body rotations of the entire satellite because the total angular momentum of the system is conserved. These potentially large attitude disturbances may violate pointing accuracy and jitter requirements. One type of thermally induced dynamics exhibited by solar panels is thermal snap. The Upper Atmosphere Research Satellite is a prominent example of a satellite that experiences thermal snap disturbances during eclipse transitions. This paper describes recent studies of thermally induced dynamicsof solarpanels, including an analysisofsatelliteattitudedynamics resulting from thermally induced structural motions and a laboratory investigation of the thermal-structural performance of a satellite solar panel. Analytical and experimental results demonstrate thermal bending deformations with acceleration transients that have characteristic thermal snap disturbance histories in response to rapid changes in heating. The studies show that solar panel thermal snap disturbances are caused by through-the-thickness temperature differences that vary at a nonconstant rate. Finite element analysis correctly predicts the thermal snap phenomenon observed in the solar panel experiments.