Working Paper

On the Generalised Anti-inverse Elasticity Rule: An Existence Result

Junichi Minagawa, Thorsten Upmann
CESifo, Munich, 2018

CESifo Working Paper No. 7041

We consider an optimal commodity taxation problem under a consumption target and prove the existence of an optimal solution for the problem. This optimal solution obeys taxation rules that are contrary to standard taxation rules such as the inverse-elasticity rule. We also verify the necessary and sufficient condition for the optimal solution to exhibit uniform pricing.

CESifo Category
Public Finance
Empirical and Theoretical Methods
JEL Classification: H210