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Prices vs. Quantities in Monopolistic Competition

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Author Info
Vetter, Henrik
Abstract

In perfectly competitive markets taxes and quotas are fully equivalent measures for environmental protection. Based on this regulators’ revealed preferences for quotas over that of fees finds its explanation in the procedures and spirits of political decision making. This paper offers another explanation: Ordinary welfare economic considerations make a quota preferable to a tax when regulating polluting firms in monopolistically competitive markets.

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File URL: http://purl.umn.edu/24203
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Publisher Info
Paper provided by Royal Veterinary and Agricultural University, Food and Resource Economic Institute in its series Unit of Economics Working papers with number 24203.

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Date of creation: 2000
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Handle: RePEc:ags:rvaewp:24203

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Related research
Keywords: Demand and Price Analysis; D61; D62; D43;

References listed on IDEAS
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  1. Hoel, Michael & Karp, Larry S., 1999. "Taxes and quotas for a stock pollutant with multiplicative uncertainty," CUDARE Working Paper Series 870, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy, revised 1999. [Downloadable!]
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  2. Buchanan, James M, 1969. "External Diseconomies, Corrective Taxes, and Market Structure," American Economic Review, American Economic Association, vol. 59(1), pages 174-77, March. [Downloadable!] (restricted)
  3. de Bovenberg, A Lans & Mooij, Ruud A, 1994. "Environmental Levies and Distortionary Taxation," American Economic Review, American Economic Association, vol. 84(4), pages 1085-89, September. [Downloadable!] (restricted)
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This page was last updated on 2009-12-26.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.