Pigouvian subsidy: Difference between revisions
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A Pigovian subsidy or '''Pigouvian subsidy''' is a [[subsidy]] provided to an activity on the grounds (i.e., with the explicit rationale) that the activity generates [[external benefit]]s (i.e., positive externalities). | A Pigovian subsidy or '''Pigouvian subsidy''' is a [[subsidy]] provided to an activity on the grounds (i.e., with the explicit rationale) that the activity generates [[external benefit]]s (i.e., positive externalities). | ||
Pigouvian subsidies are closely related to [[Pigouvian tax]]es, and are typically provided by governmental or regulatory bodies. However, unlike Pigouvian taxes, Pigouvian | Pigouvian subsidies are closely related to [[Pigouvian tax]]es, and are typically provided by governmental or regulatory bodies. However, unlike Pigouvian taxes, Pigouvian subsidies could in principle be provided through private philanthropy. | ||
Latest revision as of 23:48, 13 January 2014
Definition
A Pigovian subsidy or Pigouvian subsidy is a subsidy provided to an activity on the grounds (i.e., with the explicit rationale) that the activity generates external benefits (i.e., positive externalities).
Pigouvian subsidies are closely related to Pigouvian taxes, and are typically provided by governmental or regulatory bodies. However, unlike Pigouvian taxes, Pigouvian subsidies could in principle be provided through private philanthropy.