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Rent-Seeking with Pollution Taxation: An Extension


Brooks, M and Heijdra, B, Rent-Seeking with Pollution Taxation: An Extension, Southern Economic Journal, 54, (2) pp. 335-342. ISSN 0038-4038 (1987) [Refereed Article]

DOI: doi:10.2307/1059318


In a recent issue of this Journal, Dwight Lee analyzes pollution taxation in a rent-seeking environment. The purpose of this paper is to extend Lee's basic framework to a second-best environment. In doing so it will be shown that a Pigovian tax may be the preferred rate even if rent-seeking costs are included. The paper is organized as follows. In section II we present a slightly modified version of Lee's analysis of the optimal pollution tax in a rent-seeking environment. Having done so, it is shown that Lee's specification of the optimal pollution tax must be modified in a second-best environment. Some general results that emerge from our analysis are summarized in a proposition. In section III we offer some concluding remarks. -from Authors

Item Details

Item Type:Refereed Article
Research Division:Economics
Research Group:Applied economics
Research Field:Welfare economics
Objective Division:Economic Framework
Objective Group:Microeconomics
Objective Field:Microeconomics not elsewhere classified
UTAS Author:Brooks, M (Associate Professor Michael Brooks)
ID Code:39842
Year Published:1987
Web of Science® Times Cited:7
Deposited By:Economics and Finance
Deposited On:2006-07-06
Last Modified:2011-11-28

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