Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82558
Authors: 
Engström, Per
Year of Publication: 
2010
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 2010:12
Abstract: 
The paper extends Ng's (1987) model of optimal taxation of diamond goods - goods that are valued solely for their costliness. We extend his findings by analyzing how other goods should be taxed in the presence of pure diamond goods; modified Ramsey rules are derived in a basic single-type model as well as in a two-type model with redistribution. One key finding, that may be surprising and rather provoking, is that close complements (hip hop music) to diamond goods (bling bling) should be heavily subsidized.
Subjects: 
optimal taxation
status
luxury taxation
JEL: 
H20
H21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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