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Treich, Nicolas
and Yang, Yuting
(2021)
Public safety under imperfect taxation.
TSE Working Paper, n. 21-1188, Toulouse
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Abstract
Standard benefit-cost analysis often ignores distortions caused by taxation and the heterogeneity of taxpayers. In this paper, we theoretically and numerically explore the effect of imperfect taxation on the public provision of mortality risk reductions (or public safety). We show that this effect critically depends on the source of imperfection as well as on the individual utility and survival probability functions. Our simulations based on the calibration of distributional weights and applied to the COVID-19 example suggest that the value per statistical life, and in turn the optimal level of public safety, should be adjusted downwards because of imperfect taxation. However, we also identify circumstances under which this result is reversed, so that imperfect taxation cannot generically justify less public safety.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | February 2021 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Public safety, Environmental health, Imperfect taxation, Value per statistical life, Distortionary taxation, Wealth inequality, Risk aversion |
| JEL Classification: | D61 - Allocative Efficiency; Cost-Benefit Analysis H21 - Efficiency; Optimal Taxation H41 - Public Goods I18 - Government Policy; Regulation; Public Health Q51 - Valuation of Environmental Effects |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 08 Mar 2021 10:09 |
| Last Modified: | 26 Jan 2024 10:32 |
| OAI Identifier: | oai:tse-fr.eu:125273 |
| URI: | https://publications.ut-capitole.fr/id/eprint/42420 |
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