Optimal Taxation with Joint Production of Agriculture and Rural Amenities
25 Pages Posted: 9 Jun 2008
There are 2 versions of this paper
Optimal Taxation with Joint Production of Agriculture and Rural Amenities
Number of pages: 22
Posted: 01 Jun 2007
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86
Date Written: December 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 labour). 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.
Keywords: joint production, rural amenities
JEL Classification: H21, H23, Q10
Suggested Citation: Suggested Citation
Casamatta, Georges and Rausser, Gordon C. and Simon, Leo K., Optimal Taxation with Joint Production of Agriculture and Rural Amenities (December 2007). CEPR Discussion Paper No. DP6615, Available at SSRN: https://ssrn.com/abstract=1140544
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