Abstract
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 language | English |
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Pages (from-to) | 353-359 |
Number of pages | 7 |
Journal | European Economic Review |
Volume | 14 |
Issue number | 3 |
DOIs | |
State | Published - 1980 |