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ERIC Number: EJ1134076
Record Type: Journal
Publication Date: 2017
Pages: 9
Abstractor: As Provided
ISSN: ISSN-0022-0485
A Classroom Game on a Negative Externality Correcting Tax: Revenue Return, Regressivity, and the Double Dividend
Duke, Joshua M.; Sassoon, David M.
Journal of Economic Education, v48 n2 p65-73 2017
The concept of negative externality is central to the teaching of environmental economics, but corrective taxes are almost always regressive. How exactly might governments return externality-correcting tax revenue to overcome regressivity and not alter marginal incentives? In addition, there is a desire to achieve a double dividend in the use of externality-correcting taxes, that is, to use the revenue to offset existing distortionary taxes, such as those on labor that produce a dead weight loss. In this article, the authors explain a classroom game that was developed for students to understand the theory of externalities, taxation dead weight loss, and regressivity. Then, the problem helps students explore the actual design of a policy that satisfies the double dividend hypothesis and corrects for regressivity.
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Publication Type: Journal Articles; Reports - Descriptive
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Location: Delaware
Grant or Contract Numbers: N/A