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Inducing investments and regulating externalities by command versus taxes

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  • Glazer, Amihai

Abstract

A linear tax on an externality-generating activity may not attain the first-best social optimum. The problem arises because a monopolist’s gain from improving the characteristics of a product may differ from the social gain, even when consumers are willing to pay for the change.

Suggested Citation

  • Glazer, Amihai, 1997. "Inducing investments and regulating externalities by command versus taxes," University of California Transportation Center, Working Papers qt4hx0h53n, University of California Transportation Center.
    • Handle: RePEc:cdl:uctcwp:qt4hx0h53n
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    References listed on IDEAS

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    1. Martin L. Weitzman, 1974. "Prices vs. Quantities," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(4), pages 477-491.
    2. David L. Greene, 1990. "CAFE OR PRICE?: An Analysis of the Effects of Federal Fuel Economy Regulations and Gasoline Price on New Car MPG, 1978-89," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 37-58.
    3. Jung, Chulho & Krutilla, Kerry & Boyd, Roy, 1996. "Incentives for Advanced Pollution Abatement Technology at the Industry Level: An Evaluation of Policy Alternatives," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 95-111, January.
    4. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
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    6. Milliman, Scott R. & Prince, Raymond, 1989. "Firm incentives to promote technological change in pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 17(3), pages 247-265, November.
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    Cited by:

    1. Greene, David L, 1998. "Why CAFE worked," Energy Policy, Elsevier, vol. 26(8), pages 595-613, July.
    2. Jyh-Bang Jou, 2001. "Environment, Asset Characteristics, and Optimal Effluent Fees," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(1), pages 27-39, September.

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