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Optimal Taxation with Joint Production of Agriculture and Rural AmenitiesGeorges CasamattaToulouse School of Economics (GREMAQ-CNRS); Centre for Economic Policy Research (CEPR) Gordon C. RausserUniversity of California, Berkeley - Department of Agricultural and Resource Economics Leo K. SimonU.C. Berkeley, Dept of Agricultural and Resource Economics June 2007 Abstract: 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.
Number of Pages in PDF File: 22 Keywords: joint production, rural amenities JEL Classification: H21, Q18 working papers seriesDate posted: June 1, 2007Suggested CitationContact Information
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