Evaluating policy interventions with general equilibrium externalities

Jared C. Carbone, V. Kerry Smith

Research output: Contribution to journalArticle

43 Citations (Scopus)

Abstract

We report on the results of analytical and numerical models that describe the effects of non-separable externalities (or public goods) on public policies with important general equilibrium consequences. In the numerical exercise, we calibrate a general equilibrium model with non-separable air quality benefits in order to measure the excess burden and total net benefits of transportation and energy taxes in the 1995 U.S. economy. The change in the physical level and the economic value in air quality associated with a given policy is a function of the substitution patterns between air quality and market goods that we assume. The size of the deadweight loss due to pre-existing distortions such as a tax on labor income is substantially affected by these substitution patterns.

Original languageEnglish (US)
Pages (from-to)1254-1274
Number of pages21
JournalJournal of Public Economics
Volume92
Issue number5-6
DOIs
StatePublished - Jun 2008

Fingerprint

Policy intervention
General equilibrium
Externalities
Air quality
Substitution
Energy tax
Exercise
Labor income
Public policy
Deadweight loss
Economic value
Excess burden
General equilibrium model
Tax
US economy

Keywords

  • Excess burden
  • Externalities
  • General equilibrium

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance

Cite this

Evaluating policy interventions with general equilibrium externalities. / Carbone, Jared C.; Smith, V. Kerry.

In: Journal of Public Economics, Vol. 92, No. 5-6, 06.2008, p. 1254-1274.

Research output: Contribution to journalArticle

Carbone, Jared C. ; Smith, V. Kerry. / Evaluating policy interventions with general equilibrium externalities. In: Journal of Public Economics. 2008 ; Vol. 92, No. 5-6. pp. 1254-1274.
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