Optimal Taxation with Joint Production of Agriculture and Rural Amenities

25 Pages Posted: 9 Jun 2008

See all articles by Georges Casamatta

Georges Casamatta

Toulouse School of Economics (GREMAQ-CNRS); Centre for Economic Policy Research (CEPR)

Gordon C. Rausser

University of California, Berkeley - Department of Agricultural and Resource Economics

Leo K. Simon

U.C. Berkeley, Dept of Agricultural and Resource Economics

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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

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

Georges Casamatta (Contact Author)

Toulouse School of Economics (GREMAQ-CNRS) ( email )

Manufacture des Tabacs (bât. F)
21 Allee de Brienne
31000 Toulouse
France

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Gordon C. Rausser

University of California, Berkeley - Department of Agricultural and Resource Economics ( email )

207 Giannini Hall no. 3310
Berkeley, CA 94720
United States
510-642-6591 (Phone)
510-643-0287 (Fax)

HOME PAGE: http://are.berkeley.edu/~rausser/

Leo K. Simon

U.C. Berkeley, Dept of Agricultural and Resource Economics ( email )

207 Giannini Hall
Berkeley, CA 94720
United States
510-642-8430 (Phone)
510-643-8911 (Fax)

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