Optimal Environmental Taxation When Goods and Contamination are Durable

Amagoia Sagasta Elorza

No 1134-8984, BILTOKI from Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística)

Abstract: [EN] This paper analyzes the effects of optimal taxation on a polluting monopolist who produces a durable good and cannot precommit to future sale prices. The government establishes the taxes that maximize social welfare, measured as the present value of the sum of consumer surplus plus producer's gross profits minus environmental damage. The consequences of taxes on the production and monopolist's profits, consumer surplus, environmental damage and social welfare are analized. It is shown that optimal taxes increase social welfare and reduce environmental damage. However, the effets of taxes on monopolist's profits depend on the goverment's ability to establish different taxes in different periods and the durability of the pollution.

Keywords: durable goods and contamination; optimal taxation; monopolist (search for similar items in EconPapers)
Date: 1999-11
References: Add references at CitEc
Citations:

Downloads: (external link)
https://addi.ehu.eus/handle/10810/5883 (application/pdf)

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:ehu:biltok:5883

Ordering information: This working paper can be ordered from
Dpto. de Econometría y Estadística, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain

Access Statistics for this paper

More papers in BILTOKI from Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística) Contact information at EDIRC.
Bibliographic data for series maintained by Alcira Macías ().