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Title: Optimal Taxation with Joint Production of Agriculture and Rural Amenities

Author(s): Georges Casamatta, Gordon Rausser and Leo K Simon

Publication Date: December 2007

Keyword(s): joint production and rural amenities

Programme Area(s): Public Economics

Abstract: We show that, when there is joint production of an agricultural good and rural amenities, the first-best allocation of resources can be implemented with a tax on the agricultural good and some subsidies on the production factors (land and labour). The use of a subsidy on the agricultural good can only be explained by the desire of the policymaker to redistribute income from the consumers to the farmers.

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Bibliographic Reference

Casamatta, G, Rausser, G and Simon, L. 2007. 'Optimal Taxation with Joint Production of Agriculture and Rural Amenities'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6615