Marginal Cost of Indirect Taxation in the presence of a Demerit Externality with an Application to Carbon Dioxide Emissions in Belgium
AbstractThis paper aims to calculate marginal costs of funds (MCF) in the presence of an externality with demerit properties by using a utility scaling approach. It is an extension of a model put forward by Schroyen (2010). In the empirical section the MCF of indirect taxes in Belgium are calculated taking into account the existence of carbon dioxide emissions as demerit externality. The results reveal that scaling has a significant impact on switches in the ranking of the MCF.
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Bibliographic InfoPaper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 10/656.
Length: 34 pages
Date of creation: Jun 2010
Date of revision:
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-23 (All new papers)
- NEP-ENE-2010-10-23 (Energy Economics)
- NEP-ENV-2010-10-23 (Environmental Economics)
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