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Optimal Intervention Policies for a Region Facing Pollution-Induced Uncertainty

Charles A Ingene and Eden Yu

The Annals of Regional Science, 1989, vol. 23, issue 1, 3-18

Abstract: This paper examines optimal interventions in the presence of externality-induced uncertainty. A regional model of three activities involving polluting, nonpolluting and pollution-abating industries is developed, and a Taylor series technique is utilized to represent a stochastic regional utility function. Optimal intervention policies in the forms of output or input taxes and subsidies are then deduced and analyzed.

Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:spr:anresc:v:23:y:1989:i:1:p:3-18

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