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Financing of Public Goods by Pigouvian Taxes

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The paper considers a simple three good model taking into account a negative consumption externality and a public good. Within this framework several forms of taxation are employed in order to finance the public good. The tax instruments and the quantity of the public good are chosen optimally. The article derives the necessary conditions for an optimum and investigates the efficiency value or excess burden of a Pigouvian tax. A numerical example illustrates the findings.


  • Public Good
  • Negative Externality
  • Optimal Taxation
  • Public Good Provision
  • Marginal Damage

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© 1993 Springer-Verlag Berlin · Heidelberg

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Ebert, U. (1993). Financing of Public Goods by Pigouvian Taxes. In: Diewert, W.E., Spremann, K., Stehling, F. (eds) Mathematical Modelling in Economics. Springer, Berlin, Heidelberg.

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  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-78510-8

  • Online ISBN: 978-3-642-78508-5

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