Description Usage Arguments Value See Also Examples

Estimate elasticity from single normalized bunching observation.

1 2 | ```
elasticity(beta, binwidth, zstar, t0, t1, notch = FALSE,
e_parametric = FALSE, e_parametric_lb = 1e-04, e_parametric_ub = 3)
``` |

`beta` |
normalized excess mass. |

`binwidth` |
a numeric value for the width of each bin. |

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

`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. |

`notch` |
whether analysis is for a kink or notch. Default is FALSE (kink). |

`e_parametric` |
whether to estimate elasticity using parametric specification (quasi-linear and iso-elastic utility function). Default is FALSE (which estimates reduced-form approximation). |

`e_parametric_lb` |
lower bound for elasticity estimate's solution using parametric specification in notch setting. Default is 1e-04. |

`e_parametric_ub` |
upper bound for elasticity estimate's solution using parametric specification in notch setting. Default is 3. |

`elasticity`

returns the estimated elasticity. By default, this is based on the reduced-form approximation. To use the parametric equivalent, set e_parametric to TRUE.

1 | ```
elasticity(beta = 2, binwidth = 50, zstar = 10000, t0 = 0, t1 = 0.2)
``` |

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