Optimal taxation with joint production of agriculture and rural amenities |
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| Authors: | Georges Casamatta Gordon Rausser Leo Simon |
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| Institution: | 1. Toulouse School of Economics (GREMAQ - CNRS and CEPR), Manufacture des Tabacs, 21, alle de Brienne, 31000 Toulouse, France;2. Dept. of Agricultural and Resource Economics, University of California, Berkeley, United States |
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| Abstract: | We show that, when there is joint production of an agricultural good and rural amenities, the first-best allocation of resources can be implemented with a tax on the agricultural good and some subsidies on the production factors (land and labor). The use of a subsidy on the agricultural good can only be explained by the desire of the policymaker to redistribute income from the consumers to the farmers. |
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