On the Optimal Taxation of an Exhaustible Resource Under Monopolistic Extraction

J. Daubanes

    Research output: Working paperDiscussion paperOther research output

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    Abstract

    In a simple model of resource depletion (isoelastic demand and constant unit extraction cost), we fully characterize the set of linear effiency-inducing tax/subsidy schemes. We show that this set is infinite and all the larger as the cost of extraction is low. Depending on the magnitude of the latter, we show that there may exist optimal linear strict taxes, thus allowing the regulator to induce efficiency without subsidizing the mine industry at any date. We illustrate and argue that the exhaustibility constraint the monopolist extractor faces can be exploited by the regulator to relax the standard trade-off between inducing efficiency and raising revenues from the monopoly.
    Original languageEnglish
    Place of PublicationTilburg
    PublisherVakgroep CentER
    Number of pages15
    Volume2007-34
    Publication statusPublished - 2007

    Publication series

    NameCentER Discussion Paper
    Volume2007-34

    Fingerprint

    Optimal taxation
    Exhaustible resources
    Costs
    Industry
    Monopoly
    Tax
    Trade-offs
    Revenue
    Tax subsidies
    Monopolist
    Resource depletion

    Keywords

    • Exhaustible resources
    • Imperfect competition
    • Optimal taxation

    Cite this

    Daubanes, J. (2007). On the Optimal Taxation of an Exhaustible Resource Under Monopolistic Extraction. (CentER Discussion Paper; Vol. 2007-34). Tilburg: Vakgroep CentER.
    Daubanes, J. / On the Optimal Taxation of an Exhaustible Resource Under Monopolistic Extraction. Tilburg : Vakgroep CentER, 2007. (CentER Discussion Paper).
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    Daubanes, J 2007 'On the Optimal Taxation of an Exhaustible Resource Under Monopolistic Extraction' CentER Discussion Paper, vol. 2007-34, Vakgroep CentER, Tilburg.

    On the Optimal Taxation of an Exhaustible Resource Under Monopolistic Extraction. / Daubanes, J.

    Tilburg : Vakgroep CentER, 2007. (CentER Discussion Paper; Vol. 2007-34).

    Research output: Working paperDiscussion paperOther research output

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    Daubanes J. On the Optimal Taxation of an Exhaustible Resource Under Monopolistic Extraction. Tilburg: Vakgroep CentER. 2007. (CentER Discussion Paper).