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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

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Volume 4, Issue 1 (Nov 2005)

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Volume 6 (2006)

Volume 4 (2004)

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Volume 1 (2001)

Environmental Information Provision as a Public Policy Instrument

Emmanuel Petrakis
  • 1University of Crete,
/ Eftichios Sophocles Sartzetakis
  • 2University of Macedonia,
/ Anastasios Xepapadeas
  • 3University of Crete,
Published Online: 2005-11-14 | DOI: https://doi.org/10.2202/1538-0645.1365

Abstract

We examine information provision as a public policy instrument when products generate damages to consumers as well as environmental externalities. We show that information provision dominates taxation in terms of welfare, if information can be provided at low cost. This is because a uniform tax alone levies a heavier than optimal burden on informed consumers and allows the uninformed consumer to free ride partially on the informed consumers’ voluntary actions. If the cost of information provision is substantial, taxation is welfare superior. A policy regime that combines information provision and taxation leads to higher welfare relative to the use of either instrument alone.

Keywords: information provision; environmental taxation; individual and external damages; differentiated goods

About the article

Published Online: 2005-11-14



Citation Information: Contributions in Economic Analysis & Policy, ISSN (Online) 1538-0645, DOI: https://doi.org/10.2202/1538-0645.1365. Export Citation

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[1]
Allard van der Made
Environmental and Resource Economics, 2014, Volume 58, Number 4, Page 649

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