摘要:This paper shows that public provision of private goods may be justified onpure e.ciency grounds in an environment where individuals have relative consump-tion concerns. By providing private goods, governments directly intervene in theconsumption structure, thereby having an instrument to correct for the excessiveconsumption of positional goods. We identify su.cient conditions where publicprovision of private goods is always part of the optimal policy mix, even when con-sumption taxes are available. In fact, with public provision of private goods, thereare cases where the first-best allocation can be achieved, and (linear) consumptiontaxes can be redundant
关键词:Public Provision; Social Preferences; Status; Optimal Taxation