Wednesday, September 30, 2015
Sometimes when faced with a negative externality associated with overconsumption of a commodity you have a clear choice between imposing a Pigovian Tax on the demand side or on the supply side. (Who you impose the tax on is, of course, a different matter from the incidence of the tax.) The choice comes down to administrative efficiency. So which side should you impose it on in this case?
Posted by mus at 8:32 PM