Non-Welfarist Optimal Taxation and Behavioural Public Economics

20 Pages Posted: 15 Nov 2006

See all articles by Ravi Kanbur

Ravi Kanbur

Cornell University; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Jukka Pirttila

United Nations - World Institute for Development Economics Research (UNU/WIDER); Tampere University of Technology

Matti Tuomala

University of Tampere

Abstract

Research in behavioural economics has uncovered the widespread phenomenon of people making decisions against their own good intentions. In these situations, the government might want to intervene, indeed individuals might want the government to intervene, to induce behaviour that is closer to what individuals wish they were doing. The analysis of such corrective interventions, through taxes and subsidies, might be called 'behavioural public economics'. However, such analysis, where the government has an objective function that is different from that of individuals, is not new in public economics. In these cases the government is said to be 'non-welfarist' in its objectives, and there is a long tradition of non-welfarist welfare economics, especially the analysis of optimal taxation and subsidy policy where the outcomes of individual behaviour are evaluated using a preference function different from the one that generated the outcomes. First of all the object of this paper is to present a unified view of the non-welfarist optimal taxation literature and, second, to present behavioural public economics as a natural special case of this general framework.

Suggested Citation

Kanbur, Ravi and Pirttila, Jukka and Tuomala, Matti, Non-Welfarist Optimal Taxation and Behavioural Public Economics. Journal of Economic Surveys, Vol. 20, No. 5, pp. 849-868, December 2006. Available at SSRN: https://ssrn.com/abstract=945253 or http://dx.doi.org/10.1111/j.1467-6419.2006.00268.x

Ravi Kanbur (Contact Author)

Cornell University ( email )

301-J Warren Hall
Ithaca, NY 14853
United States
607-255-7966 (Phone)
607-255-9984 (Fax)

HOME PAGE: http://www.kanbur.dyson.cornell.edu

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Jukka Pirttila

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

Tampere University of Technology ( email )

P.O. 541, Korkeakoulunkatu 8 (Festia building)
Tampere, FI-33101
Finland

Matti Tuomala

University of Tampere ( email )

P.O. Box 607
Tampere, FIN-33101
Finland
+358-3-2156031 (Phone)
+358-3-2157254 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
11
Abstract Views
596
PlumX Metrics