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Redistribution and pollution taxes with non-linear Engel curves

Abstract:

This paper analyses optimal corrective taxation and optimal income redistribution. The Pigouvian pollution tax is higher if pollution damages disproportionally hurt the poor due to equity weighting of pollution damages. Moreover, under general utility functions, optimal pollution taxes should be set below the Pigouvian tax if the poor spend a disproportionate fraction of their income on polluting goods. However, if Engel curves are linear, optimal pollution taxes should follow the first-best ...

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Publication status:
Published
Peer review status:
Peer reviewed

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Publisher copy:
10.1016/j.jeem.2019.01.008

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Institution:
University of Oxford
Division:
SSD
Department:
Economics
Sub department:
OxCarre
Oxford college:
New College
Role:
Author
Publisher:
Elsevier Publisher's website
Journal:
Journal of Environmental Economics and Management Journal website
Volume:
95
Pages:
198-226
Publication date:
2019-02-13
Acceptance date:
2019-01-25
DOI:
EISSN:
1096-0449
ISSN:
0095-0696
Keywords:
Pubs id:
pubs:996362
UUID:
uuid:36b626ff-89d9-4800-b8f6-665aaedcaf11
Local pid:
pubs:996362
Source identifiers:
996362
Deposit date:
2019-05-15

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