Prices vs. quantities: Public finance and the choice of regulatory instruments

B-Tier
Journal: European Economic Review
Year: 2008
Volume: 52
Issue: 7
Pages: 1242-1255

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Since Montgomery [1972. Markets in licenses and efficient pollution control programs. Journal of Economic Theory 5, 395-418] and Weitzman [1974. Prices vs. quantities. Review of Economic Studies 41, 477-491], it has generally been assumed that, in a full-information setting, tradable quotas and taxes are equivalent regulatory instruments. We demonstrate that, if the government is movitated by public-finance concerns, this equivalence holds only if quotas are short lived. Moreover, the government prefers quotas with the shortest possible lifetime, or, what is equivalent in our setting, taxes.

Technical Details

RePEc Handle
repec:eee:eecrev:v:52:y:2008:i:7:p:1242-1255
Journal Field
General
Author Count
2
Added to Database
2026-01-24