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A Note on the Efficiency of Income Redistribution with Simple and Combined Policies

Published online by Cambridge University Press:  15 September 2016

David S. Bullock  and
Klaus Salhofer
David S. Bullock
Affiliation:
Department of Agricultural and Consumer Economics, University of Illinois
Klaus Salhofer
Affiliation:
Universität für Bodenkultur Wien, Department of Economics, Politics, and Law, Vienna, Austria
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Abstract

Recent studies have investigated the efficiencies of policies that use several policy instruments simultaneously (for example, a policy that uses a production subsidy combined with a production quota). Several studies of very specific cases find that optimal combination of two policy instruments is more efficient than optimal independent use of either. In this note we demonstrate using set theory and maximization theory, that all such specific results are examples of a more general result, which is that by combining m instruments efficiently, a government can always be at least as efficient as when using a subset of those m instruments. This result holds for any of the several definitions of “efficiency” in the literature.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 27 , Issue 2 , October 1998 , pp. 266 - 269
Copyright
Copyright © 1998 Northeastern Agricultural and Resource Economics Association 

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