Linear Pigovian taxes and the optimal size of a polluting industry

Ross McKitrick and Robert A. Collinge

Canadian Journal of Economics, 2000, vol. 33, issue 4, 1106-1119

Abstract: Confusion surrounding the appropriateness of long-run considerations in effluent regulation has arisen in the literature and recently carried over into textbooks. We use a factor input model under oligopsony to show that, when firms can influence the level of marginal damages, a linear pollution tax does not satisfy the long-run entry-exit condition. Previous results to the contrary are shown to depend on restrictive assumptions. Efficient policy design requires a lump-sum refund or any one of various non-linear pricing schemes.

JEL-codes: L1 Q2 (search for similar items in EconPapers)
Date: 2000
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://links.jstor.org/sici?sici=0008-4085%282000 ... PTATO%3E2.0.CO%3B2-P (text/html)
only available to JSTOR subscribers

Related works:
Journal Article: Linear Pigovian taxes and the optimal size of a polluting industry (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cje:issued:v:33:y:2000:i:4:p:1106-1119

Ordering information: This journal article can be ordered from
https://www.economic ... ionen/membership.php

Access Statistics for this article

Canadian Journal of Economics is currently edited by Zhiqi Chen

More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().