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Estimating the Corrective Tax for Goods whose Consumption Affects the Consumer’s Health

Author

Listed:
  • Donald L. Alexander

    (Western Michigan University)

  • Jon R. Neill

    (Western Michigan University)

Abstract

Taxing goods whose consumption has an adverse impact on the consumer’s health appears to be gaining support. But the social benefit from taxes on these goods is debatable. This paper considers what the corrective tax on such a good is and applies this theory to one good whose health effects are well established. More specifically, we produce a formula for computing the corrective tax on a good whose consumption may adversely affect the health of the consumer, and then use this formula to calculate the corrective tax for one such good, cigarettes.

Suggested Citation

  • Donald L. Alexander & Jon R. Neill, 2017. "Estimating the Corrective Tax for Goods whose Consumption Affects the Consumer’s Health," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 45(1), pages 103-117, March.
    • Handle: RePEc:kap:atlecj:v:45:y:2017:i:1:d:10.1007_s11293-017-9533-y
    DOI: 10.1007/s11293-017-9533-y
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    References listed on IDEAS

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    Cited by:

    1. Adrian R. Fleissig, 2020. "Impact of Casino Gambling and Lotteries on Demand for Other ‘Sin’ Goods," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 48(3), pages 327-338, September.

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