A Pigouvian Challenge

Readers of this blog know that I am no fan of the Pigouvian tax scheme (nor, for that matter, Pigouvian welfare economics). Advocates of such taxation often ignore the problems of attempts to aggregate preferences and valuation given the inherent difficulty in doing so because of the fact that knowledge is dispersed and cannot be communicated to a single mind. Thus, I was delighted to see this challenge from Peter Klein:

Please name the activities you believe deserve Pigouvian subsidies. For each activity provide the efficient subsidy amount, explain how this was calculated, and say how the revenues should be raised.

Any takers?

One response to “A Pigouvian Challenge

  1. Outstanding! I have high regard for Gregory Mankiw, but his Pigou club drives me mad. I think he (and many economists) get captivated by the efficiency of a Pigouvian tax, then lose site of first principles. Taxes are to raise revenue, not control the populace.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s