This paper considers a government that seeks both to redistribute income and to encourage or discourage the consumption of a certain good. This good is assumed to be either a merit or demerit good. Individuals differ in their exogenous income and in their preferences for the merit good. The government can perfectly observe the level of consumption of the merit good. However, it cannot observe neither income nor preferences. The only observable variable is thus each individual's consumption of the merit good.
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Paper provided by Catholique de Louvain - Center for Operations Research and Economics in its series Papers with number
9909.
Length: 24 pages Date of creation: 1999 Date of revision: Handle: RePEc:fth:louvco:9909
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Find related papers by JEL classification: H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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