Proportional Profit Taxes and Resource Management under Production Uncertainty
AbstractThe impact of proportional profit taxes on input use is analyzed under conditions of production uncertainty and risk aversion. Two kinds of profit taxes are considered: proportional profit taxes with perfect loss offset and revenue-neutral profits taxes. Their impact on optimal input use is examined under various forms of production uncertainty, such as the Just-Pope model and the cases of multiplicative and additive uncertainty. It is shown that the structure of risk attitudes, the form of production uncertainty, the underlying (stochastic) technical interdependencies, and the risk-input relations are crucial features in determining the impact of proportional profit taxes on optimal input use.
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Bibliographic InfoPaper provided by University of Crete, Department of Economics in its series Working Papers with number 9819.
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- Karagiannis, Giannis, 1999. "Proportional Profit Taxes And Resource Management Under Production Uncertainty," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(02), December.
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