Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/82897 
Year of Publication: 
2001
Series/Report no.: 
Working Paper No. 2001:14
Publisher: 
Uppsala University, Department of Economics, Uppsala
Abstract: 
When a public good is excludable it is possible to charge individuals for using the good. We study the role of prices on excludable public goods within an extension of the Stern-Stiglitz version of the Mirrlees optimal income tax model. Our discussion includes both the case where the public good is a final consumer good and the case where it is an intermediate good. We demonstrate that for a public consumer good charging a positive price may be desirable, but only under certain conditions. However, charging a lower than optimal price may be less efficient than setting a zero price. Conditions are identified under which consumers should be rationed in their demand rather than adjusting demand to price. We also conclude that producers using an intermediate public good as an input should not be charged a positive price.
Subjects: 
excludable public goods
public sector pricing
information constrained Pareto efficiency
JEL: 
H21
H41
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.