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Efficient Policies for Green Design in a Vintage Durable Good Model

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  • Thomas Eichner

    ()

  • Marco Runkel

Abstract

Using a dynamic durable good model, we investigate efficiency-restoring policy schemes in case of free garbage disposal. In the long-run, efficiency is attained by a subsidy on recyclability of the durable and a tax on the purchase of the durable. On the short-run adjustment path, in contrast, both policy instruments may change their signs such that the government harms recyclability by taxing it and promotes the demand for the durable good by subsidizing it. A deposit--refund system is shown to yield the efficient allocation both in the short-run as well as in the long-run. Copyright Springer 2005

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File URL: http://hdl.handle.net/10.1007/s10640-004-2302-9
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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.

Volume (Year): 30 (2005)
Issue (Month): 3 (03)
Pages: 259-278

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Handle: RePEc:kap:enreec:v:30:y:2005:i:3:p:259-278

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: durable good; efficient taxation; recyclability; vintage;

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Cited by:
  1. Bernard, Sophie, 2011. "Remanufacturing," Economics Papers from University Paris Dauphine 123456789/6984, Paris Dauphine University.
  2. Chen, Chialin & Liu, Lucy Qian, 2014. "Pricing and quality decisions and financial incentives for sustainable product design with recycled material content under price leadership," International Journal of Production Economics, Elsevier, vol. 147(PC), pages 666-677.
  3. Pangburn, Michael S. & Stavrulaki, Euthemia, 2014. "Take back costs and product durability," European Journal of Operational Research, Elsevier, vol. 238(1), pages 175-184.
  4. Yamaguchi, Rintaro & Ueta, Kazuhiro, 2010. "Capital depreciation and waste accumulation in capital-resource economies," MPRA Paper 23786, University Library of Munich, Germany.

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