Altruism, Voluntary Contributions and Neutrality. The Case of Environmental Quality
This paper develops a dynamic model wherin production generates pollution that is viewed as a public bad by consumers. There are two types of consumers: those who are altruist a la Barro-Becker and leave bequests to their children and those who are pure life-cyclers. Both types of consumers voluntarily contribute to the quality of environment. It appears that if bequests by altruists and voluntary contributions by all are positive, redistribution is neutral. To achieve optimality, one needs a tax on capital to reach the optimal level of pollution and a differential subsidy on altruistic and non altruistic consumers's contributions.
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