Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/229542 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8724
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
This paper compares some of the most common and debated ways of financing the provision of impure public goods/services in a unified dynamic general equilibrium framework. We study and rank a wide variety of ways ranging from provision without any user charges, to provision with full user charges; we also study mixed systems. In our quest for the best system, we address both efficiency and distribution issues. The focus is on the effects of user prices on individual incentives and choices. We identify circumstances under which a market system of user prices not only enhances aggregate efficiency but is also Pareto improving meaning that makes all types of income groups better off. But we also provide examples of circumstances under which user prices on impure public goods do not make sense.
Subjects: 
user prices
taxes
efficiency
equity
JEL: 
H40
H20
D60
Document Type: 
Working Paper
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