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Progressivity of Burden-Sharing in a Lindahl Equilibrium

Author

Listed:
  • Wolfgang Buchholz
  • Dirk Rübbelke

Abstract

In this paper, we show that progressivity (regressivity) of burden sharing in a Lindahl equilibrium is a direct consequence of gross complementarity (substitutability) between the private and the public good when the public good is taken as the numéraire. We, moreover, link the respective conditions for gross complementarity to the more familiar ones in which the private good serves as the numéraire.

Suggested Citation

  • Wolfgang Buchholz & Dirk Rübbelke, 2017. "Progressivity of Burden-Sharing in a Lindahl Equilibrium," CESifo Working Paper Series 6704, CESifo.
    • Handle: RePEc:ces:ceswps:_6704
    as

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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp6704.pdf
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    References listed on IDEAS

    as
    1. Kovenock, Daniel & Sadka, Efraim, 1981. "Progression under the benefit approach to the theory of taxation," Economics Letters, Elsevier, vol. 8(1), pages 95-99.
    2. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185.
    3. Aaron, Henry & McGuire, Martin, 1970. "Public Goods and Income Distribution," Econometrica, Econometric Society, vol. 38(6), pages 907-920, November.
    4. Samuelson, Paul A, 1974. "Complementarity-An Essay on the 40th Anniversary of the Hicks-Allen Revolution in Demand Theory," Journal of Economic Literature, American Economic Association, vol. 12(4), pages 1255-1289, December.
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    More about this item

    Keywords

    Lindahl equilibrium; progressive (regressive) burden sharing; complements and substitutes;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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