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Optimal Commodity Taxation and Redistribution within Households

Author

Listed:
  • Bargain, Olivier B.

    (University of Bordeaux)

  • Donni, Olivier

    (University of Cergy-Pontoise)

Abstract

Using a collective model of consumption, we characterize optimal commodity taxes aimed at targeting specific individuals within the household. The main message is that distortionary indirect taxation can circumvent the agency problem of the household. Essentially, taxation should discourage less the consumption of a certain group of goods: those for which the slope of the Engel curves is larger for the targeted person.

Suggested Citation

  • Bargain, Olivier B. & Donni, Olivier, 2011. "Optimal Commodity Taxation and Redistribution within Households," IZA Discussion Papers 5608, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5608
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    Cited by:

    1. Helmuth Cremer & Jean-Marie Lozachmeur & Kerstin Roeder, 2021. "Household bargaining, spouses’ consumption patterns and the design of commodity taxes," Oxford Economic Papers, Oxford University Press, vol. 73(1), pages 225-247.
    2. Donni, Olivier & Molina, José Alberto, 2018. "Household Collective Models: Three Decades of Theoretical Contributions and Empirical Evidence," IZA Discussion Papers 11915, Institute of Labor Economics (IZA).
    3. Molina, Jose Alberto & Velilla, Jorge & Ortega, Raquel, 2015. "The decision to become an entrepreneur in Spain: The role of the household financial situation," MPRA Paper 68101, University Library of Munich, Germany.
    4. Alain Babatoundé & Bart Capéau & Romain Houssa, 2023. "Welfare effects of indirect tax policies in West Africa," Working Papers of Department of Economics, Leuven 746845, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.

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    Keywords

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    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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