[WYD] What's Up With eCan's Tax Revenues? (Day 1797)
Day 1,797, 10:43
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Published in Canada 
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by
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by Addy Lawrence
I'm impressed Addy, an MDP in my day wouldnt of even had a second thought in voting for the sponsored candidate.
-powerown64
Foreward...
I would say the economy in this game sucks but that is common knowledge AND it isn't truly an economy because admin exercises too much influence. Regardless, it is tough to sell what you produce and it is tough for the government to pay for MPPs and fund Military Units.
There used to be an Economic Advisory Council in eCanada and they used to track stuff and make recommendations. As far as I can tell, this group is dead. This article is the sort of stuff that would happen in that group.
On the indisputable facts...
The cash balance in treasury is available from the country administration page. Once in a while I log that figure and put it on this spreadsheet.
The government expenditures are available in the country administration page as well, I log those expenses in the spreadsheet.
Tax revenues occur continuously and increase the cash balance. At any given time between two noted cash balances you can solve for tax revenue using basic algebra.
Based on this premise, here is the general ledger of eCan over the past 45 days. Note that VAT was not unified until just 32 days ago, and at 17%. And 13 days ago, VAT was changed to 20%. It is important to keep VAT unified. There is no way to tell how much of the tax revenue comes from food or tanks, so keeping them both at 17% renders this point moot.
On moving averages...
Now, there are issues with this data collection method, namely it is not done EXACTLY at server reset. This creates a cut-off error for the daily tax revenues.
To address this issue, I keep a rolling average of daily tax revenues. The last 7 days, the last 14 days and the last 30 days. This reduces the noise of promotions by admin and is better and establishing trends.
On statistical predictions based on the data...
For a regression analysis to possess statistical confidence, it must have an R value higher than 0.8000 and both of these analyses fail that test. More data needs to be collected to make a decision with statistical confidence.
On my personal observations and conclusions...
eCan has been losing regions daily for a week. eCdns in ePoland occupied territory are likely shopping in the ePoland market and enjoying the prices, which has a negative impact on eCan tax revenues.
The 7 Day Average has been dropping for over a week and the 14 Day has been dropping for the last 3 days. Even the 30 day average is starting to trend down.
It is difficult to say "it's because VAT is high" because the fact we are losing regions hurts as well.
If a change is made, I would recommend dropping the VAT significantly to 10% so that we can collect data at a lower point and see if we can increase the confidence level of the analysis. We already have observations at 17%.
To obtain any statistical confidence at any given rate of VAT, it is imperative to leave the rate unchanged afterward for at least 10 days and also to keep VAT for food and tanks the same.
Denouement
Taxes affect everyone. Abundant taxes enable government to provide excellent social programs and defence. No taxes really tie your hands. Taxes can't be changed by one person, it requires a collective effort to change them. I hope that this educates folks a bit with respect to the tax situation and that people do not act rashly in response to any disappointment with tax revenues.
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Addy's your daddy!!!
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What's up with eCan's tax revenues?
http://tinyurl.com/WYD-1797
Excellent article Addy. I'm down to start up the Economic Advisory Council again.
Only a couple of things we should track down to remove noise in the data:
1) Bot prices: If bot price goes down, tax revenue goes down even if VAT is the same. If bot price goes up ( in weapons for example during rocket missions) tax revenue goes up.
2) Production bonus: Affect offer and demand. For example, less food bonus and players will be more likely to buy food in the marketplace to complete DO
Excellent Article Addy!
I doubt there is a bot anymore. But it is possible.
Bot price does not go up during rocket missions. Prices go up during rocket missions because of increased demand. We must think of erepublik as a global market.
Prices go up during rocket missions because of increased demand
x2
Our high VAT prices means that our citizens can easily go elsewhere to get cheaper stuff (already in Poland for RW). This reduces demand on canadian goods. This means that canadian company owners are also making a lot less. After tax, canadian companies are making less money per unit than other countries. AND we are making less units per company. High VAT prices are hurting our citizens without any substantial revenue increase.
I agree with Addy, I believe that VAT prices should be lower. But we also need to take into account depreciation. I would classify that the erep market is in depression. Everyday weapon prices drop. This means that we need to optimize MPP treaties because they will require a lot more budget %.
Thanks for putting all of this together Addy! I'm sure everyone appreciates it!
eCanada is a fiscal hell / Nous croulons sous les taxes!
http://www.erepublik.com/en/article/ecanada-is-a-fiscal-hell-nous-croulons-sous-les-taxes--2142309/1/20
Nice paper Addy.
Other variables to consider are :
- local buying ( by patriotism, even if it is cheaper elsewhere...)
- ignorance ( about how to buy in foreign markets ... beginners are the best friends of old players having a lot of companies ... )
I remember doing this when I was the MoF, I always looked at it as the job of that role, one of the most important after the budget point in fact. It's a shame that isn't still the case. Good job Addy on presenting this information, and I would agree with the general analysis. Taxes are probably too high, but it's impossible to say definitively yet because instability makes clarity impossible.
Everyone thought (and most likely still do) they new better than me when I tried to explain compound taxation and that higher taxes equal less treasury. But that was when you were living down South. Perhaps you'll have better luck than I. Good article Addy, even though I read it as I would if Seinfeld spoke it.
Seems to me we have a pretty good council shaping up in this comment thread. Impartial and across party lines. This is a great idea, thanks Addy.
Great to have you back Addy. eCanada is starting to to row all in the same direction for a change.
"Prices go up during rocket missions because of increased demand"
True, demands trigers the price increase and since bot price is a moving average it goes up by consequence (check it in you storage) and thus bot pays more tax.
Excellent analysis.
The bot is dead AFAIK. It is statistically dead in eUS.
I've always been rather fond of making sure I had one parameter per variable in my regressions, as adding more (Or using polynomials) can lean towards curve-fitting (Which will yield a high R2 without actually being better). Other than that, I think other factors could be included, such as country's active population during the day, being at war or not, etc. It wouldn't look as neat on an excel spreadsheet, but I think we could get more relevant analysis from a multivariate set of data.
Good analysis, I hope you can keep it up and get more data points.
2 questions/comments:
1) how is "size of market" defined?
2) mathy stuff: two things are wrong with your claim that "for a regression analysis to possess statistical confidence, it must have an R value higher than 0.8000 and both of these analyses fail that test." First, R^2 doesn't mean squat for nonlinear models...
..Second, how high is high enough to be confident heavily depends on the field. I don't think I've ever seen an R^2 of 0.8000 in economics. It's probably more prevalent in fields with more controlled experiments, which your data definitely isn't. In finance, asset pricing models often have an R^2 around 0.15.
Size of market is determined by dividing the tax revenue by the rate of VAT. There is some noise due to the income tax included in tax revenue, but at 1% it's trivial.
So, for future graphs you should label it as market volume instead.
And now that I study it, it looks like a really useless graph.