Optimal taxation with joint production of agriculture and rural amenities

We show that, when there is joint production of an agricultural good and rural amenities, the first-best allocation of resources can be implemented with a tax on the agricultural good and some subsidies on the production factors (land and labor). The use of a subsidy on the agricultural good can only be explained by the desire of the policymaker to redistribute income from the consumers to the farmers.


Issue Date:
Nov 15 2008
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/45869
Total Pages:
21
Series Statement:
CUDARE Working Papers
1068




 Record created 2017-04-01, last modified 2017-04-04

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