Plain Sense Economics

N. Gregory Mankiw posted a semi-tongue-in-cheek note on his blog suggesting that we consider a system where email senders pay to send a message. One of Mankiw’s readers opined…
I think an excellent Pigouvian tax would be a tax on emails. Many emails involve a negative externality (I don’t really want to receive [...]

I love the cheese, the crust, and most of the other, assorted things that can go on a pizza. Sadly, many of those things are not good for me. This article, put out by Reuters, reports on a study measuring the impact of a tax on pizza on the number of pizza and soda calories [...]

As a followup to my earlier note on Oregon’s Measures 66 & 67, we need to take a quick look at some of the theories and rationale behind government taxes. This isn’t and can’t be an exhaustive discussion, but hopefully it is a start for our considerations. For SOU students I commend to you my [...]

This article in The Wall Street Journal describes the British economist, A. C. Pigou.
Here’s an excerpt:
In the years leading up to his death, in 1959, he was a reclusive figure, rarely venturing from his rooms at King’s College. His novel ideas on taxing polluters and making health insurance compulsory were met with indifference: Keynesianism was [...]

Growing up in Michigan, we called that carbonated beverage pop.

Slate published this article, “Sweet Surrender: Taxing soda to make you stop drinking it.” This is another example of using an excise tax to change consumer behavior. If one believes that there are negative externalities to the consumption of sugar-laden, artificially-flavored, carbonated water, then these taxes [...]

Thanks to a tip from Greg Mankiw’s blog – we learn that Oregon was the first state to impose a tax on gasoline – back in 1919. This article in Wired describes the interest of the state to fund highway projects, including the Columbia River Highway up the Gorge. So, this isn’t really an [...]

A Pigovian tax (named after economist Arthur Pigou) aims to correct negative externalities. In plain-sense English this means that when a private market has a negative effect on others, a tax can sometimes offset that negative effect. The additional feature of a Pigovian tax is that it lets the private parties work out the best [...]

In my earlier post on Externalities I mentioned that one form of government intervention to correct a negative externality is a Pigovian tax. Named after the English economist A.C. Pigou (pee-GOO), this tax attempts to bring outside, social costs into the decision that a seller makes in a market.
“…come again?…” Here’s what I mean…. [...]