Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 1997:12: Price Subsidies versus Public Provision

Sören Blomquist () and Vidar Christiansen ()
Additional contact information
Sören Blomquist: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden
Vidar Christiansen: Oslo University, Postal: Department of Economics, P.O. Box 1095 Blindern, NO-0317 Oslo, Norway

Abstract: The paper discusses which redistributional policies are efficient when the identity of the high and low skill persons is private information. Our major purpose is to identify the more efficient policy when, presumably for administrative reasons, the policy option is confined to the choice between a price subsidy or public provision in addition to income taxation. We also study the simultaneous use of nonlinear taxation, commodity taxation and public provision of private goods.

Keywords: price subsidy; public provision; private goods; in-kind transfers; optimal taxation

JEL-codes: H21; H42; I38

44 pages, May 5, 1997

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Published as
Sören Blomquist and Vidar Christiansen, (1998), 'Price Subsidies versus Public Provision', International Tax and Public Finance, vol 5, pages 283-306

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