Affordable Access

Publisher Website

Another note on deadweight loss

Authors
Journal
Journal of Public Economics
0047-2727
Publisher
Elsevier
Publication Date
Volume
18
Issue
2
Identifiers
DOI: 10.1016/0047-2727(82)90007-x

Abstract

Abstract In a recent article, J.A. Kay proposed a useful measure of the deadweight loss arising from a commodity tax system. The measure answers the question: How much more would the taxed consumer be willing to pay in a lump sum rather than as a commodity tax? Kay's computation of the marginal deadweight loss does not yield the change in this measure for small changes in commodity tax rates, however. This note clarifies Kay's otherwise excellent contribution, derives the measure for Cobb–Douglas utilities, and examines a useful property of it.

There are no comments yet on this publication. Be the first to share your thoughts.