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An Optimal Corrective Tax for Thai Shrimp Farming


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  • Tipparat Pongthanapanich

    (Department of Agricultural and Resource Economics, Faculty of Economics, Kasetsart University)

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    “If Thai shrimp farming were taxed, how much should it be?” is the key re-search question of this paper. The dynamic-constraint optimization model in-corporating accumulated nutrient load from farm discharges is applied in the analysis. The model implies some tax has to be imposed on stock externality that is equal to increasing shadow cost of nutrient stock before damage occurs. However, the simulation results show very small shadow costs at the beginning of the paths and indicate that nutrient load in Andaman has a negligible effect on the sea but significant on the Gulf of Thailand. A socially efficient level of production for Thailand would be around 70-80% of private optimal produc-tion. The tax regime ensures a higher net gain from trade than at private opti-mum but it is ambiguous in term of net social welfare.

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    Bibliographic Info

    Paper provided by University of Southern Denmark, Department of Environmental and Business Economics in its series Working Papers with number 64/2005.

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    Length: 52 pages
    Date of creation: Apr 2005
    Date of revision:
    Handle: RePEc:sdk:wpaper:64

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    Keywords: Green tax; stock externality; shrimp farming; Gulf of Thailand; Andaman Sea;

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    Cited by:
    1. Tipparat Pongthanapanich, 2005. "Options and Tradeoffs in Krabi's Coastal Land Use," Working Papers 66/2005, University of Southern Denmark, Department of Environmental and Business Economics.
    2. Tipparat Pongthanapanich, 2006. "Optimal Coastal Land Use and Management in Krabi, Thailand: Compromise Programming Approach," Working Papers 67/2006, University of Southern Denmark, Department of Environmental and Business Economics.
    3. Tipparat Pongthanapanich & Eva Roth, 2006. "Toward Environmental Responsibility of Thai Shrimp Farming through a Voluntary Management Scheme," Working Papers 70/2006, University of Southern Denmark, Department of Environmental and Business Economics.


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