Optimal tax policy under heterogeneous environmental preferences

被引:0
|
作者
Arbex, Marcelo [1 ]
Behringer, Stefan [2 ]
Trudeau, Christian [1 ]
机构
[1] Univ Windsor, Dept Econ, 401 Sunset Ave, Windsor, ON N9B 3P4, Canada
[2] SciencesPo, Dept Econ, 28 Rue St Peres, F-75007 Paris, France
关键词
Externalities; Environmental preferences; Optimal taxation; POLLUTION-CONTROL; SPILLOVERS;
D O I
10.1016/j.econlet.2017.05.032
中图分类号
F [经济];
学科分类号
02 ;
摘要
We model an economy of K heterogeneous regions where agents value consumption vs. nature differently. Consumption obtained through pollution-inducing production also generates a negative externality on neighbors. We show that even with a decentralized policy we can obtain first-best efficiency by choosing a combination of pollution taxes in both regions and lump-sum transfers. Moreover, we show that optimal pollution taxes are determined only by the externality parameters, independent of agents' preferences for consumption and nature. (C) 2017 Elsevier B.V. All rights reserved.
引用
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页码:79 / 82
页数:4
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