Designing Regulatory Policies for Complex Externalities: The Case of Agricultural Pollution
Athanasios Kampas (),
Katerina Melfou () and
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Katerina Melfou: Department of Agricultural Products Marketing and Quality Control, Technological Institute of Western Macedonia, 53100 Florina, Greece
No 2012-6, Working Papers from Agricultural University of Athens, Department Of Agricultural Economics
The paper examines the issue of designing and implementing policy measures to control complex agricultural externalities. Complex externalities refer to the situation where a production (firm on firm) externality coexists with a detrimental (firm on society) externality. The paper identifies the optimal solution for complex externalities, which is a combination of spatially differentiated taxes. However, severe information requirements render the first-best policy infeasible. Finally, a likely voluntary scheme based on firm self-report is examined which may enforce firm compliance with the optimal policy.
Keywords: complex externalities; state dependent linear ambient tax; voluntary schemes; moral hazard; incentive compatibility; spatial externalities (search for similar items in EconPapers)
JEL-codes: H23 Q19 Q28 (search for similar items in EconPapers)
Pages: 19 pages
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Journal Article: Designing Regulatory Policies for Complex Externalities: The Case of Agricultural Pollution (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:aua:wpaper:2012-6
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