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Equal Sacrifice and Fair Burden Sharing in a Public Goods Economy

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Author Info
Wolfgang Buchholz ()
Wolfgang Peters ()

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Abstract

Applying a willingness to pay approach known from contingent valuation in environmental economics, we develop an ordinally based measure for the size of individual sacrifice that is connected with an agent's contribution to a public good. We construct a selection mechanism that picks the unique efficient solution among all allocations that have an equal sacrifice as defined in this way. We show that the solution thus obtained correspond to Moulin’s egalitarian equivalent allocation, conforms to both the ability to pay and the benefit principles, and has much in common with the Lindahl equilibrium.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 1997.

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Date of creation: 2007
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Handle: RePEc:ces:ceswps:_1997

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Related research
Keywords: public goods; cooperative solutions; fairness; egalitarian equivalent solutions;

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Find related papers by JEL classification:
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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  1. Jon R. Neill, 2000. "The benefit and sacrifice principles of taxation: A synthesis," Social Choice and Welfare, Springer, vol. 17(1), pages 117-124. [Downloadable!] (restricted)
  2. Lange, Andreas & Vogt, Carsten & Ziegler, Andreas, 2007. "On the importance of equity in international climate policy: An empirical analysis," Energy Economics, Elsevier, vol. 29(3), pages 545-562, May. [Downloadable!] (restricted)
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  3. Wolfgang Buchholz & Wolfgang Peters, 2007. "Justifying the Lindahl solution as an outcome of fair cooperation," Public Choice, Springer, vol. 133(1), pages 157-169, October. [Downloadable!] (restricted)
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  4. Theodore C. Bergstrom, 2006. "Benefit-Cost in a Benevolent Society," American Economic Review, American Economic Association, vol. 96(1), pages 339-351, March. [Downloadable!]
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  5. Udo Ebert, 2003. "Environmental Goods and the Distribution of Income," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(4), pages 435-459, August. [Downloadable!] (restricted)
  6. Wolfgang Buchholz & Richard Cornes & Wolfgang Peters, 2006. "Lindahl Equilibrium Versus Voluntary Contribution to a Public Good: The Role of the Income Distribution," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(1), pages 28-49, March. [Downloadable!] (restricted)
  7. Lasse Ringius & Asbjørn Torvanger & Arild Underdal, 2002. "Burden Sharing and Fairness Principles in International Climate Policy," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 2(1), pages 1-22, March. [Downloadable!] (restricted)
  8. Hines Jr., James R., 2000. "What is benefit taxation?," Journal of Public Economics, Elsevier, vol. 75(3), pages 483-492, March. [Downloadable!] (restricted)
  9. François Maniquet & Yves Sprumont, 2004. "Fair Production and Allocation of an Excludable Nonrival Good," Econometrica, Econometric Society, vol. 72(2), pages 627-640, 03. [Downloadable!] (restricted)
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  10. Moulin, Herve, 1987. "Egalitarian-Equivalent Cost Sharing of a Public Good," Econometrica, Econometric Society, vol. 55(4), pages 963-76, July. [Downloadable!] (restricted)
  11. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February. [Downloadable!] (restricted)
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  12. Moyes, Patrick, 2003. "Redistributive effects of minimal equal sacrifice taxation," Journal of Economic Theory, Elsevier, vol. 108(1), pages 111-140, January. [Downloadable!] (restricted)
  13. Mitra, Tapan & Ok, Efe A, 1996. "Personal Income Taxation and the Principle of Equal Sacrifice Revisited," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 925-48, November.
    Other versions:
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