Endogenous Timing and the Taxation of Discrete Investment Choices

19 Pages Posted: 30 Jun 2002

See all articles by Paolo M. Panteghini

Paolo M. Panteghini

Department of Economics and Management; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: May 2002

Abstract

This article discusses the effects of taxation on the discrete choice of alternative projects. In particular, it is shown that if taxation affects the optimal timing of irreversible investment, then the discrete choice is distorted as well. This result has both methodological and political implications.

Keywords: Effective Average Tax Rate, Timing and Real Options

JEL Classification: H25, H32

Suggested Citation

Panteghini, Paolo M., Endogenous Timing and the Taxation of Discrete Investment Choices (May 2002). Available at SSRN: https://ssrn.com/abstract=316765

Paolo M. Panteghini (Contact Author)

Department of Economics and Management ( email )

Contrada Santa Chiara 50
BRESCIA, BS 25122
Italy

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.cesifo.de

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