This paper studies the distributional effect of taxes and subsidies on consumption externalities. It is well known that a Pigouvian excise tax need be imposed on external diseconomies if the competitive equilibrium is to be Pareto-optimal. The focus of this paper is an examination of whether these taxes enhance a Pareto-improvement with respect to the pre-tax equilibrium.
|Number of pages||7|
|Journal||European Economic Review|
|State||Published - 1980|