- About Us
- Prospective Students
- Current Students
- Centers & Research
- Alumni & Friends
We caught up with Dr. David Agrawal, an Assistant Professor of Economics both at the Martin School and in the Department of Economics, to learn more about his interests. His website can be found here.
What is your favorite topic to teach? Why?
Taxes! Taxes change the behavior of people. Taxes can change how much someone will work or save. They can influence charitable giving and decisions on where to live or work. Taxes can influence the timing of births and even the timing of deaths. Given that taxes can potentially influence so many aspects of behavior, I want my students to learn whether these responses are large or small and how the size of these responses influences optimal tax policy.
What research are you currently working on?
A recent paper, “The Internet as a Tax Haven? The Effect of the Internet on Tax Competition” studies how municipalities adjust their sale tax rate in response to e-commerce. If online transactions are untaxed, the Internet may act as a tax haven and put downward pressure on local sales tax rates. On the other hand, if e-commerce is taxed, the Internet may act as an anti-haven, allowing cities and towns to collect taxes on remote transactions that previously went untaxed. The results in this paper suggest that many towns perceive the Internet as a tax haven and lower their tax rate if they have a higher number of households with access to the Internet. In addition, William Fox (University of Tennessee) and I are writing a policy research paper “Sales Taxes in an e-Commerce Generation” that discusses the economic argument for levying sales taxes on the basis of the destination of the sale. We then discuss various policy options for how the United States can reform its sales and use tax system to better achieve destination taxation on online transactions. In conducting this research, we highlight several economic lessons from recent European Union reforms designed to address taxing digital products.
What is the “hot topic” in your field right now?
One of the hottest topics in public finance is the study of notches and the bunching of individuals on the tax-favored side of the notch. A notch is a discontinuous change in an individual’s budget set. These notches in the tax code imply that a very small change in an individual’s behavior can cause very large changes in tax payments. Our tax system features many notches, but they have only been studied recently. One example is the Saver’s Credit. A married couple with income of $30,000 that contributes more than $2000 of savings will receive a $1000 tax credit. However, if this couple declares $30,001 of income and has the same saving, the credit will fall to only $400. The incentives to work an hour less or hide some income from the tax authority are large. My advisor’s article, “Buenas Notches: Lines and Notches in Tax System Design” was an important article that helped inspire research on notches.
What is your favorite thing about the Martin School?
I enjoy having many colleagues who are supportive of my research agenda and who provide great feedback on my research. I also appreciate having several colleagues that conduct research on taxation.
MPA/MPP students in their final semester are busy with more than just classes. Most of you are also tackling your Capstone Projects and applying for jobs. We have a new resource for you! While we e-mail out opportunities on our listservs, we know it can be tough to keep track. So, we are now going to post those opportunities here on our website so that you can access them at your leisure. Of course, if you stumble across fellowships or other positions you think your colleagues would find of interest, share those with Jackie (email@example.com) or Sarah (firstname.lastname@example.org) to get them posted.
This past weekend, Nathan and Sarah Smith represented the Martin School at NASPAA’s second annual student simulation competition, taking on international climate change policy. Students from all over the midwest region participated at IUPUI’s campus in Indianapolis.
Each was assigned a sector whose interests they were to represent as they negotiated with six other sectors to create a policy package reducing global temperature rise to two degrees Celsius. All the teams not only negotiated with each other, but also used a sophisticated climate change simulator to test their ideas and solidify their plans. At the end of the day, each of the three teams produced a policy package, presentation, memo, and staffing suggestion for their recommendations.
“I was assigned to the Climate Hawks sector, which represents environmental interest groups like Greenpeace, World Wide Fund for Nature (WWF), The Nature Conservancy, for example,” Nathan shares. This sector was unique in that it didn’t have any decision-making power, unlike Sarah’s sector– global average carbon pricing. Both Sarah and Nathan enjoyed working directly with MPP and MPA students from all over the midwest on such a timely issue.
In the end, Nathan’s team was the regional winner! Nathan felt that his team’s presentation, focus on feasibility, and achievement of a very difficult objective set his team apart. Nathan describes some of the major features of their package below:
“There were a few key features of our plan that required some sacrifices from nearly everyone involved in order to effectively curb climate change. Some of these features that we, after much debate, came to an agreement on were a $100/ton price on carbon, significant reductions in agriculture land use, an accelerated nationwide retirement of coal, new regulations on automobile and building efficiency standards, and significant long-term subsidies for renewable energy sources and new technology.”
While working on one of the toughest international policy questions of our time was taxing, both Nathan and Sarah walked away from the competition hopeful. To achieve success in climate change globally, everyone must come to the table ready to work together.
Zihe (Lauren) Guo is a Ph.D. candidate at the Martin School of Public Policy and Administration. We asked her a few questions about her work!
My research interests include public budgeting, financial management, and nonprofit finance and management. My previous studies focused on a series of questions such as, how do debts impact fiscal volatility of local governments? Do nonprofit organizations have systematic and nonsystematic financial risk? My dissertation focuses on borrowing costs of local governments in the U.S. and China, particularly paying attention to debts issued through conduits. As an alternative way to issuing bonds, the conduit debt financing has been widely used by local governments and nonprofit organizations. Since most of local governments have been burdened with heavy debts, understanding whether or not the conduit debt financing actually decrease borrowing costs is very important.
Discovering my favorite research area is an incremental process. I have broad interests and strong curiosity for lots of issues. In the process of conducting research, I am more and more aware of my “true love” research topics. Discovering a great idea is always very exciting, but the most exciting moments appear when I find that exploring this idea will answer important questions and lead to some unprecedented research.
Challenges and opportunities are always hand in hand. For example, data is not always easily accessed and unpredictable and confused research results are often discovered. But it is a great pleasure to solve all kinds of problems and finish an excellent research project.
Except my own interests, another important reason I really enjoy the experience of studying and doing research here is that I always receive the support from faculty and students in the Martin School. They are always supportive to each other, and their infinite potentials are inspiring me every day. Pursuing a Ph.D. degree is like drinking a cup of coffee, a little bitter, but very mellow. Thanks to the Martin School, these years have been memorable and valuable.
At the Martin School we prepare leaders and produce research that improves lives, communities and organizations through the Commonwealth of Kentucky, the nation, and the world. Our alumni lead government organizations large and small. They manage non-profit agencies and are among the foremost faculty and researchers dedicated to investigating problems in the public sector. If you are considering an MPA, MPP, or Ph.D to further your career in public service, we invite you to take a closer look at the Martin School. Imagine yourself here.
Our Academics Are Top Notch
U.S. News & World Report ranks our program #25 in the nation overall, #4 for Public Finance and Budgeting, and #28 for public policy analysis. As a top-25 program, we challenge our students and prepare them to be leaders in their field. If you'd like to know more about our rigorous curriculum, check out our program descriptions under the "Prospective Students" tab above.
Ask any of our students or faculty, and they can tell you about the warmth of our community. Walking around the office, you can see it. Students regularly stop by professors' offices and hang out in the computer lab to work on homework together. Our faculty get to know our students' interests and goals. You just simply cannot be anonymous around the Martin School; if you envision yourself at a personal program, come visit with us.
Leading by Example
We embrace our institution's promise to our Commonwealth as a public land-grant university. Our faculty have served in prominent roles in Kentucky's government, including the state's budget office. Our alumni are also leading the way in research and administration. If you want to learn from those that have served in the trenches in the classroom, through our mentor program, or at networking opportunities, consider the Martin School.