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Proportional Profit Taxes And Resource Management Under Production Uncertainty

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  • Karagiannis, Giannis

Abstract

The 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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  • Karagiannis, Giannis, 1999. "Proportional Profit Taxes And Resource Management Under Production Uncertainty," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(2), pages 1-11, December.
    • Handle: RePEc:ags:jlaare:30794
    DOI: 10.22004/ag.econ.30794
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    1. Drichoutis, Andreas C. & Koundouri, Phoebe, 2012. "Estimating risk attitudes in conventional and artefactual lab experiments: The importance of the underlying assumptions," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 6, pages 1-15.

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