• norsk
    • English
  • English 
    • norsk
    • English
  • Login
View Item 
  •   Home
  • Norges Handelshøyskole
  • Department of Business and Management Science
  • Discussion papers (FOR)
  • View Item
  •   Home
  • Norges Handelshøyskole
  • Department of Business and Management Science
  • Discussion papers (FOR)
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

Does stochasticity matter? : dynamic pigouvian taxation in an uncertain environment

Sandal, Leif Kristoffer; Steinshamn, Stein Ivar
Working paper
Thumbnail
View/Open
sandal leif k 0604.pdf (188.6Kb)
URI
http://hdl.handle.net/11250/164069
Date
2004-04
Metadata
Show full item record
Collections
  • Discussion papers (FOR) [509]
Abstract
The effects of discounting, stochasticity, non-linearities and maximum decay upon an optimal corrective tax are analyzed using stochastic dynamic optimization. Optimal corrective taxes are derived as explicit feedback control laws in the presence of both flow and stock externalities when the decay of aggregated pollution is subject to a general stochastic process. This represents an adaptive approach to regulation of the environment. The problem has been solved using a non-linear Hamilton-Jacobi-Bellman equation. The model applied is quite general in the state variable, accumulated pollution, and in the control variable, production. The objective function is to maximize expected social welfare defined as the sum of consumers’ and producers’ surplus adjusted for externalities. Social welfare is not assumed to be separable in production and accumulated pollution. The main result is that the optimal tax is more sensitive to discounting and non-linearities than to stochasticity.
Publisher
Norwegian School of Economics and Business Administration. Department of Finance and Management Science
Series
Discussion paper
2004:6

Contact Us | Send Feedback

Privacy policy
DSpace software copyright © 2002-2019  DuraSpace

Service from  Unit
 

 

Browse

ArchiveCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsDocument TypesJournalsThis CollectionBy Issue DateAuthorsTitlesSubjectsDocument TypesJournals

My Account

Login

Statistics

View Usage Statistics

Contact Us | Send Feedback

Privacy policy
DSpace software copyright © 2002-2019  DuraSpace

Service from  Unit