ECOS3997
Interdisciplinary Impact in Economics
Assignment: Written Report
University of Sydney
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Assessment: Written Report
• Written report (60%)
Due: Friday 14 October (Week 10)
3000 words maximum (excluding references)
∗ Format: double spaced, 12 point font and 1 inch
margins
∗ Figure and tables count toward the word limit: each
gure/table counts for 100 words.
Online submission: similarity checking via TurnitIn.
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Written Report: Brief
Brief: Write a report for the federal government comparing the
level of inequality in Australia with other countries and over
time. Identify at least one area of government policy that
aects the level of inequality and describe alternative policy
options available to the government.
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Written Report
• You will be assessed on your ability to articulate empirical
and quantitative analysis in the applied context of economic inequality.
• You will be assessed on your written communication.
• You will not be able to write this the night before submission. Good writing is a skill and takes time. Leave time
to edit and rene your documents.
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Suggested Structure of the Report
1. Introduction and background (approx. 400 words).
2. Compare the level of inequality in Australia with other
countries and over time (approx. 1250 words).
3. Describe the eect of a government policy that may aect
inequality and describe alternative policy options available
to the government (approx. 750 words).
4. Discussion and recommendations (approx. 400 words).
5. Conclusions (approx. 200 words).
6. References
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#1: Introduction
• Succinctly describe the purpose of your report
• Why should we care about inequality? Possible reasons
include:
How the benets of growth are distributed through the
economy. The Social Welfare Function we studied in
Topic 3 formalises this.
Relationship between inequality and economic opportunity and mobility (see Topic 4)
• Summarise your main ndings.
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#2: Trends in Inequality
In this section of your report, you should think carefully about:
Measurement: What are the pros and cons of measuring inequality using income, consumption and wealth data? What
dierent insights do we get from each? What does the evidence show? You might also want to discuss poverty and
economic (dis)advantage. By how much does the tax and
transfer system reduce inequality?
Data sources: What dierent sources of data can be used to
measure inequality? What are the advantages and limitations
of each, and how does this aect your conclusions?
Statistical measures: Do alternative statistical measures lead
you to dierent conclusions? Recall also our discussion of
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equivalisation, imputed rent, and how these adjustments can
aect measurement of inequality.
Economic mobility: How is life-course mobility related to inequality? What is the relationship between inequality and
intergenerational mobility? Is intergenerational mobility the
same regardless of where you live in Australia?
References: The main lecture references for this section of
your paper are likely to be Topics 1, 2, 4 and 5. You should
also consult the main papers from those lectures, which are
available on e-Reserve. The exercises in Tutorials 1 and 2
should be helpful in presenting, interpreting and choosing between inequality measures.
#3: Policy Options
In this section of your report, you should choose one (or two)
areas of government policy that aect the level of inequality
and outline policy options available to government.
In class, we spent the most time discussing top (labour and
capital) income taxation (Topics 3 & 5 and Tutorials 3 & 5).
We also discussed the relationship between returns to education and inequality (Topic 4 and Tutorial 4). You have freedom
to choose other aspects of government policy, in which case
you will be responsible for nding the required references.
To make things concrete, supposing you choose top income
taxation as the policy to analyse, some of the main issues you
might want to discuss are:
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Conceptual: What theoretical considerations determine optimal top income taxation? What are the key parameters determining the optimal top income tax rate? How does the level
of inequality aect the optimal top income tax rate?
Empirical: Provide a menu of alternative top marginal income tax rates under dierent parameter values, justifying
your choices. Explain the key uncertainties and how they affect your conclusions.
What is the cross-country relationship between inequality, top
income tax rates and economic growth, and what are the implications for top income taxation? Do you nd the crosscountry evidence convincing enough to guide government policy?
Key references: Topics 3 & 5, Tutorials 3 & 5 and key papers
from those lectures on the reading list.
#4: Discussion and Recommendations
In this section you will want to provide a discussion of your
analysis in Section #3 and provide policy recommendations to
government. Things you might want to discuss include:
• What are the costs and benets of inequality? (We discussed aspects of this in the context of returns to education.)
• What does the public know about the level of inequality,
and how does this aect support for redistribution? (Topic
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• If you discussed optimal income taxation in Section #3
then this would be a good place to discuss evidence on
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popular support for the optimal income taxation framework
(see Topic 3), and the implications for setting government
policy based on the optimal taxation framework.
• What are the key uncertainties, and how do they aect
your recommendations?
• Acknowledge alternatives to your recommendations and
explain why dierent people may reach alternative views
based on positive and normative criteria.
Self-reection
Write a short paragraph (approx. 150 words) reecting on
what you have learned and how satised you are with the
quality of your written report. Do not use this to guess or
suggest the mark you think you deserve for the assignment.
This is not included in the word limit.
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General Points
Audience: This is a report for government, so do not present
regressions or equations and avoid jargon. Your reader is a
smart non-economist. The Productivity Commission report is
a good example of the style of writing to aim for.
Data: You should critically analyse and distill the information
from lectures and the key papers on the reading list. But you
should also present your own analysis. The following websites
contain information you may nd useful for your analysis:
• The World Wealth and Income Database:
<https://wid.world/>(web)
• OECD Income Distribution Database:
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<https://www.oecd.org/social/income-distribution-database.htm>(web)
• Chartbook of Economics Inequality (Atkinson and Morelli):
<https://www.chartbookofeconomicinequality.com/>(web)
• All the Ginis database (World Bank):
<http://data.worldbank.org/data-catalog/all-the-ginis>(web)
• Luxembourg Income Study (LIS):
<https://www.lisdatacenter.org/>(web)
Analysis and presentation of data: Present data that make
your key points in easy to read graphs and tables. The Productivity Report is a good example of how to present data
graphically.
Try to label your graphs and tables so they can be interpreted
on their own. Use the text to analyse your graphs and tables
rather than just state what they show.
Decide on your main points and then choose the data to make
those points, justifying your choices clearly and succinctly. Do
not bombard the reader with endless graphs and tables. For
example, a carefully chosen 4 Figures and 2 Tables could be
sucient.
Scope: You do not need to cover everything we discussed in
lectures to write an excellent report. You should focus on
pulling out the information you need and nding connections
between the topics and concepts we discussed.
Organisation: You are free to structure your own report. What
I’ve sketched above is just one possibility, drawing out (some)
connections between the material we discussed in lectures.
Dierent research question: You are welcome to modify the
policy brief, but you must email me rst to discuss. In this
case, you will be responsible for any required additional research beyond the reading list.
