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http://hdl.handle.net/10419/63974
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| Title: | | Optimal forest taxation under private and social amenity valuation  |
| Authors: | | Koskela, Erkki Ollikainen, Markku |
| Issue Date: | | 2002 |
| Series/Report no.: | | ETLA Discussion Papers, The Research Institute of the Finnish Economy (ETLA) 815 |
| Abstract: | | This paper analyzes the socially optimal forest taxation in the rotation framework when the government has a binding tax revenue requirement. In the Faustmann model the optimal design of taxation consists of non-distortionary taxes, such as site productivity tax, site value tax or profit tax. A combination of distortionary unit (or yield) tax and timber tax can also be used to collect the tax revenue in a nondistortionary way. In the Hartman model with forest amenity services as a public good, the optimal design consists of a non-distortionary tax and a Pigouvian tax, which adjusts the private rotation age to the socially optimal one. Now only the site productivity tax is non-distortionary, while unit, yield, timber, site value and profit taxes generally serve as corrective Pigouvian taxes. Finally, in the absence of a non-distortionary tax, if the marginal valuation of amenity services is non-decreasing with the age of forest stand, a combination of unit (or yield) and timber taxes can be used to both tax revenue collection and Pigouvian correction. |
| Subjects: | | rotation age forest amenities optimal forest taxation |
| JEL: | | Q23 H21 |
| Document Type: | | Working Paper |
| Appears in Collections: | | ETLA Discussion Papers, Research Institute of the Finnish Economy
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