Description Usage Arguments Value Examples
u(z,n,elas,t1,t2,Tax,zstar) =
z * (1 - t1) + [z > zstar] * ((z - zstar) * (t2 - t1) - Tax) - n / (1 + (1 / elas)) * (z / n)^(1 + (1 / elas))
1 | util_calc(z, n, elas, t1, t2, Tax, zstar)
|
z |
Earnings |
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) |
The utility of earning sum z given other parameters.
1 | util_calc(900, 950, 0.2, 0.1, 0.2, 100, 1000)
|
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