This paper deals with optimal income and commodity taxation in an economy, where alcohol is an externality-generating consumption good. In our model, alcohol can be bought domestically, imported, or produced illegally. Border trade alone implies an incentive to set the domestic alcohol tax below...

This paper concerns optimal taxation and public goods in an economic federation with decentralized leadership, where one lower level government is the first mover also in the horizontal dimension. Under plausible assumptions, horizontal leadership reinforces the incentives created by...

Adaptation is omnipresent but people systematically fail to correctly anticipate the degree to which they adapt. This leads individuals to make inefficient intertemporal decisions. This paper concerns optimal income taxation to correct for such anticipation-biases in a framework where consumers...

This paper deals with optimal income taxation based on a model with households where men and women allocate their time between market work and household production, and where households differ depending on which spouse has comparative advantage in market work. The purpose is to analyze the tax...

This paper deals with optimal income taxation based on a model with households where men and women allocate their time between market work and household production, and where households di¤er depending on which spouse has comparative advantage in market work. The purpose is to analyze the tax...

Much evidence suggests that people are concerned with their relative consumption, i.e., their consumption in relation to the consumption of others. Yet, the social costs of conspicuous consumption have so far played little (or no) role in savings-based indicators of sustainable development. The...

This paper deals with optimal income taxation and relative consumption under a welfarist government that fully respects people’s preferences and a paternalist government that does not share the consumer preference for relative consumption. Consistent with previous findings, relative...

The optimal provision of a state-variable public good, where the global climate is the prime example, is analyzed in a model where people care about their relative consumption. We consider both keeping-up-with-the-Joneses preferences (where people compare their own current consumption with...

This paper concerns optimal redistributive non-linear income taxation in an OLG model, where people care about their own consumption relative to (i) other people's current consumption, (ii) own past consumption, and (iii) other people's past consumption. We show that both (i) and (iii) affect...

Adaptation is omnipresent but people systematically fail to correctly anticipate the degree to which they adapt. This leads individuals to make inefficient intertemporal decisions. This paper concerns optimal income taxation to correct for such anticipation-biases in a framework where consumers...