Performance of the Ambient Tax: Does the Nature of the Damage Matter?

Marc Willinger, Nasreddine Ammar () and Ahmed Ennasri ()

Environmental & Resource Economics, 2014, vol. 59, issue 3, 479-502

Abstract: The ambient tax is often considered as an efficient instrument to achieve a first best outcome of ambient pollution when the regulator cannot observe individual emissions, or when monitoring costs are prohibitive. While this view is supported to a large extent by experimental findings, there remains several hurdles that hinder the implementation of the ambient tax in the field. One of these hurdles is the nature of the damage. Experimental findings suggest that the efficiency of the ambient tax is higher under external damage, i.e. if ambient pollution affects non-polluters (Spraggon in J Public Econ 84:427–456, 2002 ) than under internal damage, i.e. if ambient pollution affects polluters themselves (Cochard et al. in Environ Resour Econ 30:393–422, 2005 ). But this result rests on very different experimental settings. Therefore, we designed a new experiment that allows to compare external and internal damage within a common setting. Our main finding is that the ambient tax is equally efficient under internal and external damage. Copyright Springer Science+Business Media Dordrecht 2014

Keywords: Ambient tax; Efficiency; Endogenous externality; Exogenous externality; Experimental economics; Non-point source pollution (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10640-013-9743-y (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Performance of the ambient tax: does the nature of the damage matter? (2011)
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:kap:enreec:v:59:y:2014:i:3:p:479-502

Ordering information: This journal article can be ordered from
http://www.springer. ... al/journal/10640/PS2

DOI: 10.1007/s10640-013-9743-y

Access Statistics for this article

Environmental & Resource Economics is currently edited by Ian J. Bateman

More articles in Environmental & Resource Economics from Springer, European Association of Environmental and Resource Economists Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().