Title
Discrete choice models and optimal two-part tariffs in the presence of externalities: optimal taxation of cars
Author
Faculty/Department
Faculty of Applied Economics
Publication type
report
Publication
Antwerpen :UFSIA, [*]
Source (series)
Research paper / Faculty of Applied Economics UFSIA-RUCA ; 2000:021
Volume/pages
49 p.,
Carrier
E
Target language
English (eng)
Affiliation
University of Antwerp
Abstract
The purpose of this paper is to analyse optimal two-part tariffs in the presence of externalities within the framework of a model of discrete choice. The prototype application of the model is optimal taxation of car ownership and car use to correct for external costs. The externality we consider is allowed to cause feedback effects on demand and ownership shares and, therefore, on tax revenues. It is found that only the feedback effect of the externality on ownership shares is important in determining the optimal tax structure. When external costs differ between car types, it is shown that the role of fixed taxes crucially depends on the available variable tax instruments; various restrictions on variable tax instruments are analysed. We also study the implications of heterogeneity and distributive concerns for the optimal taxation of externalities via user and ownership taxes. We identify the specific role of the distribution of ownership and of conditional demands as well as the distributive impact of the externality itself.
Full text (open access)
https://repository.uantwerpen.be/docman/irua/4da536/515562a7.pdf
Handle