A Subsidy That is Inversely Related to the Product Price
Bibliographic Data
| ID | 9949641 |
|---|---|
| Authors | Takahiko Kiso (0000-0003-2281-7444, University of Aberdeen, corresponding author) |
| Year | 2022 |
| Volume | 132 |
| Issue | 646 |
| Pages | 2173-2206 |
| Publication date | 2022-01-10 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1093/ej/ueac002 |
| OpenAlex | W3201390270 |
| Language | EN |
| Citations received | 2 |
| References cited | 24 |
This study considers a new subsidy design to support the purchase or production of target products. Under the proposed design, subsidy payments are inversely related to product prices. Compared to ‘flat’ subsidies, this design reduces producers’ market power and the subsidy benefits passed on to them, improving the cost-effectiveness of government spending (by up to 50% according to simulations based on an actual subsidy programme). Additionally, this subsidy’s cost-effectiveness and incidence can be adjusted flexibly by changing the policy parameters. Finally, the subsidy design can be modified to provide larger payments to higher-quality products, thereby offsetting disincentives for quality improvement
Business · Economics · Product (mathematics · Subsidy · Energy, Environment, and Transportation Policies · Mathematics
| Citations per year | 1 |
|---|---|
| Citation span | 2024 - 2025 (2) |
| Highly cited | No |