Ameliorating congestion by income redistribution
Consider a community with individuals who consume a private good and use a congestible facility. Without a congestion fee, use of the congestible facility will exceed the socially optimal level. We show that under some conditions this externality problem can be solved by income redistribution. Indeed, the poor can gain from a redistribution to the rich.
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- Romano, Richard E, 1991. "When Excessive Consumption Is Rational," American Economic Review, American Economic Association, vol. 81(3), pages 553-64, June.
- Michael J. Boskin & Eytan Sheshinski, 1978. "Optimal Redistributive Taxation When Individual Welfare Depends upon Relative Income," The Quarterly Journal of Economics, Oxford University Press, vol. 92(4), pages 589-601.
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- Varian, Hal R., 1980. "Redistributive taxation as social insurance," Journal of Public Economics, Elsevier, vol. 14(1), pages 49-68, August.
- Hochman, Harold M & Rodgers, James D, 1969. "Pareto Optimal Redistribution," American Economic Review, American Economic Association, vol. 59(4), pages 542-57, Part I Se.
- Evans, Alan W, 1992. "Road Congestion: The Diagrammatic Analysis: Comment," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 211-17, February.
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