Optimal taxation of a monopolistic extractor: Are subsidies necessary?
This note reconsiders the optimal taxation problem when extraction of an exhaustible resource is monopolistic. In a standard model, I explicitly characterize and examine all the efficiency-inducing paths of taxes/subsidies on the resource. Consistently with the literature, there is a family of such optimal paths. In contrast with Im (2002), it may not be necessary to subsidize the monopoly at any date: within the family of optimal paths of taxes/subsidies, there may exist some paths along which the regulator raises positive revenues at all dates. This illustrates how the static trade-off between inducing efficiency and raising tax revenues in the presence of market power is relaxed under exhaustibility.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gaudet, Gerard & Lasserre, Pierre, 1988.
"On comparing monopoly and competition in exhaustible resource exploitation,"
Journal of Environmental Economics and Management,
Elsevier, vol. 15(4), pages 412-418, December.
- Gaudet, G. & Lasserre, P., 1986. "On Comparing Monopoly and Competition in Exhaustible Resource Exploitation," Cahiers de recherche 8601, Universite de Montreal, Departement de sciences economiques.
- Karp, Larry & Livernois, John, 1992. "On efficiency-inducing taxation for a non-renewable resource monopolist," Journal of Public Economics, Elsevier, vol. 49(2), pages 219-239, November.
- Hassan Benchekroun & Ngo Van Long, 2008.
"A Class Of Performance-Based Subsidy Rules,"
The Japanese Economic Review,
Japanese Economic Association, vol. 59(4), pages 381-400.
- Hassan Benchekroun & Ngo Van Long, 2007. "A Class Of Performance-Based Subsidy Rules," Departmental Working Papers 2007-05, McGill University, Department of Economics.
- Hassan Benchekroun & Ngo Van Long, 2004. "Designing a Performance Indicator to Economize on Monopoly Subsidy," CIRANO Working Papers 2004s-08, CIRANO.
- DAUBANES Julien & GRIMAUD AndrÃ©, 2006.
"On the North-South Effects of Environmental Policy: Rent Transfers, Relocation and Growth,"
LERNA Working Papers
06.26.219, LERNA, University of Toulouse.
- Grimaud, André, 2007. "On the North-South Effects of Environmental Policy: Rent Transfers, Relocation, Incentives to Research and Growth," IDEI Working Papers 477, Institut d'Économie Industrielle (IDEI), Toulouse.
- Grimaud, André, 2009. "Taxation of a Polluting Non-Renewable Resource in the Heterogeneous World," IDEI Working Papers 541, Institut d'Économie Industrielle (IDEI), Toulouse.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716.
- Yucel, Mine Kuban, 1989. "Severance taxes and market structure in an exhaustible resource industry," Journal of Environmental Economics and Management, Elsevier, vol. 16(2), pages 134-148, March.
- Hassan Benchekroun & Ngo Van Long, 1997.
"Efficiency Inducing Taxation for Polluting Oligopolists,"
CIRANO Working Papers
- Benchekroun, Hassan & van Long, Ngo, 1998. "Efficiency inducing taxation for polluting oligopolists," Journal of Public Economics, Elsevier, vol. 70(2), pages 325-342, November.
- Solow, Robert M, 1974. "The Economics of Resources or the Resources of Economics," American Economic Review, American Economic Association, vol. 64(2), pages 1-14, May.
- Stiglitz, Joseph E, 1976. "Monopoly and the Rate of Extraction of Exhaustible Resources," American Economic Review, American Economic Association, vol. 66(4), pages 655-661, September.
- Gaudet, Gérard & Lasserre, Pierre, 1990. "Dynamiques comparées des effets de la taxation minière," L'Actualité Economique, Société Canadienne de Science Economique, vol. 66(4), pages 467-497, décembre.
- Tullock, Gordon, 1979. "Monopoly and the Rate of Extraction of Exhaustible Resources: Note," American Economic Review, American Economic Association, vol. 69(1), pages 231-233, March.
- Im, Jeong-Bin, 2002. "Optimal taxation of exhaustible resource under monopoly," Energy Economics, Elsevier, vol. 24(3), pages 183-197, May.
- Lewis, Tracy & Matthews, Steven A. & Burness, H. Stuart., "undated".
"Monopoly and the Rate of Extraction of Exhaustible Resources: Notes,"
137, California Institute of Technology, Division of the Humanities and Social Sciences.
- Lewis, Tracy R & Matthews, Steven A & Burness, H Stuart, 1979. "Monopoly and the Rate of Extraction of Exhaustible Resources: Note," American Economic Review, American Economic Association, vol. 69(1), pages 227-230, March.
- Bergstrom, Theodore C, 1982. "On Capturing Oil Rents with a National Excise Tax," American Economic Review, American Economic Association, vol. 72(1), pages 194-201, March.
- Benchekroun, Hassan & Van Long, Ngo, 2002. "On the multiplicity of efficiency-inducing tax rules," Economics Letters, Elsevier, vol. 76(3), pages 331-336, August.
- Bergstrom, Theodore C. & Cross, John G. & Porter, Richard C., 1981. "Efficiency-inducing taxation for a monopolistically supplied depletable resource," Journal of Public Economics, Elsevier, vol. 15(1), pages 23-32, February.
- Villamor Gamponia & Robert Mendelsohn, 1985. "The Taxation of Exhaustible Resources," The Quarterly Journal of Economics, Oxford University Press, vol. 100(1), pages 165-181.
When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:33:y:2011:i:3:p:399-403. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.