Environmental policies with excess burden of taxation in free-entry mixed markets
Lili Xu () and
Sang-Ho Lee
International Review of Economics & Finance, 2018, vol. 58, issue C, 1-13
Abstract:
This study investigates environmental policies in free-entry mixed markets taking account of excess burden of taxation. We consider and compare the two ex-ante and ex-post tax policies in which the government chooses the optimal environmental tax before or after private firms invest fixed costs and enter the market, respectively. When the excess burden of taxation is small (large), we find that ex-post taxation imposes a lower (higher) tax level than ex-ante taxation, which induces a larger (smaller) number of firms and a higher (lower) environmental damage. We also show that the excess burden of taxation can increase the welfare, but ex-ante taxation always yields higher welfare than ex-post taxation. Finally, we show that privatization policy in a free-entry market decreases environmental damage but increases welfare only when the entry cost is low.
Keywords: Environmental policy; Ex-ante taxation; Ex-post taxation; Free entry mixed market (search for similar items in EconPapers)
JEL-codes: H25 L13 L32 Q58 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056018301369
Full text for ScienceDirect subscribers only
Related works:
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:eee:reveco:v:58:y:2018:i:c:p:1-13
DOI: 10.1016/j.iref.2018.02.020
Access Statistics for this article
International Review of Economics & Finance is currently edited by H. Beladi and C. Chen
More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().