Externality-correcting taxes and regulation
Much of the literature on externalities has considered taxes and direct regulation as alternative policy instruments. Both instruments may in practice be imperfect, reflecting informational deficiencies and other limitations. We analyse the use of taxes and regulation in combination, to control externalities arising from individual consumption behaviour. We consider cases where taxes are either imperfectly differentiated to reflect individual differences in externalities, or where some consumption escapes taxation. In both cases we characterise the optimal instrument mix, and show how changing the level of direct regulation alters the optimal externality tax.
|Date of creation:||Sep 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (+44) 020 7291 4800
Fax: (+44) 020 7323 4780
Web page: http://www.ifs.org.uk
More information through EDIRC
|Order Information:|| Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE|
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.:
- Vidar Christiansen & Stephen Smith, 2009.
"Externality-correcting taxes and regulation,"
IFS Working Papers
W09/16, Institute for Fiscal Studies.
- Hoel, Michael, 1998. " Emission Taxes versus Other Environmental Policies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(1), pages 79-104, March.
- A. Lans Bovenberg & Lawrence H. Goulder, 2001.
"Environmental Taxation and Regulation,"
NBER Working Papers
8458, National Bureau of Economic Research, Inc.
- Wijkander, Hans, 1985. "Correcting externalities through taxes on/subsidies to related goods," Journal of Public Economics, Elsevier, vol. 28(1), pages 111-125, October.
- Green, Jerry & Sheshinski, Eytan, 1976.
"Direct versus Indirect Remedies for Externalities,"
Journal of Political Economy,
University of Chicago Press, vol. 84(4), pages 797-808, August.
- Balcer, Yves, 1980. "Taxation of externalities: Direct versus Indirect," Journal of Public Economics, Elsevier, vol. 13(1), pages 121-129, February.
- Hoel, Michael, 2011. "Environmental R&D," Memorandum 12/2010, Oslo University, Department of Economics.
- Eskeland, Gunnar S, 1994. "A Presumptive Pigovian Tax: Complementing Regulation to Mimic an Emissions Fee," World Bank Economic Review, World Bank Group, vol. 8(3), pages 373-94, September.
- Innes, Robert, 1996. "Regulating Automobile Pollution under Certainty, Competition, and Imperfect Information," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 219-239, September.
- Don Fullerton & Ann Wolverton, 1997. "The Case for a Two-Part Instrument: Presumptive Tax and Environmental Subsidy," NBER Working Papers 5993, National Bureau of Economic Research, Inc.
- Christiansen, Vidar, 1984. "Which commodity taxes should supplement the income tax?," Journal of Public Economics, Elsevier, vol. 24(2), pages 195-220, July.
- Atkinson, A. B. & Stiglitz, J. E., 1976. "The design of tax structure: Direct versus indirect taxation," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 55-75.
When requesting a correction, please mention this item's handle: RePEc:ifs:ifsewp:09/16. 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: (Benita Rajania)
If references are entirely missing, you can add them using this form.