Income redistribution through commodity programmes and the marginal welfare cost of taxation
Most economic welfare analysis of farm programmes are usually computed based on the assumption that the social opportunity cost of a dollar of public spending is equivalent to a dollar of private income. The approach simplifies the analysis but ignores the welfare cost of distortion caused by collec...
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| Format: | Article |
| Language: | English |
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Penerbit Universiti Kebangsaan Malaysia
1992
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| Online Access: | http://psasir.upm.edu.my/id/eprint/37647/ http://psasir.upm.edu.my/id/eprint/37647/1/Income%20redistribution%20through%20commodity%20programmes%20and%20the%20marginal%20welfare%20cost%20of%20taxation.pdf |
| _version_ | 1848848664270733312 |
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| author | Baharumshah, Ahmad Zubaidi |
| author_facet | Baharumshah, Ahmad Zubaidi |
| author_sort | Baharumshah, Ahmad Zubaidi |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | Most economic welfare analysis of farm programmes are usually computed based on the assumption that the social opportunity cost of a dollar of public spending is equivalent to a dollar of private income. The approach simplifies the analysis but ignores the welfare cost of distortion caused by collection of taxes to finance public expenditure. This study shows that when the marginal opportunity cost of a dollar of government spending is greater than one dollar then the net social cost of farm programmes involving public expenditure is greater than typically estimated. Four policy options were considered in this paper and we showed that output subsidy is less pareto superior than tariff as commonly thought. Further, our analysis shows the pareto superior program is the one that combines production control couple with target prices and output subsidy. |
| first_indexed | 2025-11-15T09:38:05Z |
| format | Article |
| id | upm-37647 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T09:38:05Z |
| publishDate | 1992 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-376472016-02-01T05:09:59Z http://psasir.upm.edu.my/id/eprint/37647/ Income redistribution through commodity programmes and the marginal welfare cost of taxation Baharumshah, Ahmad Zubaidi Most economic welfare analysis of farm programmes are usually computed based on the assumption that the social opportunity cost of a dollar of public spending is equivalent to a dollar of private income. The approach simplifies the analysis but ignores the welfare cost of distortion caused by collection of taxes to finance public expenditure. This study shows that when the marginal opportunity cost of a dollar of government spending is greater than one dollar then the net social cost of farm programmes involving public expenditure is greater than typically estimated. Four policy options were considered in this paper and we showed that output subsidy is less pareto superior than tariff as commonly thought. Further, our analysis shows the pareto superior program is the one that combines production control couple with target prices and output subsidy. Penerbit Universiti Kebangsaan Malaysia 1992-06 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/37647/1/Income%20redistribution%20through%20commodity%20programmes%20and%20the%20marginal%20welfare%20cost%20of%20taxation.pdf Baharumshah, Ahmad Zubaidi (1992) Income redistribution through commodity programmes and the marginal welfare cost of taxation. Jurnal Ekonomi Malaysia, 25. pp. 47-61. ISSN 0126-1962 http://www.ukm.my/fep/jem/content/1992-1.html |
| spellingShingle | Baharumshah, Ahmad Zubaidi Income redistribution through commodity programmes and the marginal welfare cost of taxation |
| title | Income redistribution through commodity programmes and the marginal welfare cost of taxation |
| title_full | Income redistribution through commodity programmes and the marginal welfare cost of taxation |
| title_fullStr | Income redistribution through commodity programmes and the marginal welfare cost of taxation |
| title_full_unstemmed | Income redistribution through commodity programmes and the marginal welfare cost of taxation |
| title_short | Income redistribution through commodity programmes and the marginal welfare cost of taxation |
| title_sort | income redistribution through commodity programmes and the marginal welfare cost of taxation |
| url | http://psasir.upm.edu.my/id/eprint/37647/ http://psasir.upm.edu.my/id/eprint/37647/ http://psasir.upm.edu.my/id/eprint/37647/1/Income%20redistribution%20through%20commodity%20programmes%20and%20the%20marginal%20welfare%20cost%20of%20taxation.pdf |