A Note on the Ad Valorem Taxation on Polluting Products in a Green Market
Type de matériel :
51
This article studies the effects of a commodity tax on consumption and production behaviours in a green market and its implications for welfare components. The analysis rests on a review of vertical differentiation models assuming an ecological awareness of consumers. We distinguish two classes of models according to the assumption adopted on cost function of polluting firms. We show that an ad valorem tax decreases product differentiation and prices. Nevertheless, it reduces the consumers’ surplus and the firms’ profits and it increases the environmental damage. Only a lump sum redistribution of tax revenue may improve welfare. Classification JEL: D62, H21, L13, Q58
Réseaux sociaux