The distributional aspects of a tax on externalities

Efraim Sadka*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


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.

Original languageEnglish
Pages (from-to)353-359
Number of pages7
JournalEuropean Economic Review
Issue number3
StatePublished - 1980


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