J4 ›› 2015, Vol. 14 ›› Issue (7): 19-23.

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Analysis of Optimal Water Pollution Tax: Based on the Pigou Tax

  

  1. College of Politics, Law, Economics and Management, Dali University, Dali, Yunnan 671003, China
  • Received:2015-01-16 Online:2015-07-15 Published:2015-07-15

Abstract:

Water pollution, a kind of disgusting product with the negative externality, may leads to loss of market efficiency. Imposing
Pigou Tax can help solving this problem. According to Pigou Tax principle, the principle of determining the optimal water pollution tax
is: per unit of water pollution tax is equal to marginal external cost of water pollution brought by the unit. But quantifying marginal cost
is difficult, so it is feasible to use Present Value Method and Contingent Valuation Method to quantify the quasi Pigou Tax.

Key words: optimal water pollution tax, Present Value Method, Contingent Valuation Method, Pigou Tax

CLC Number: