Applications for South Carolina's Wetlands of a General Model of Efficient Solutions to Externalities.

摘要

A general model for all externality problems is based on a two-fold dichotomous classification scheme:Public/private and large number/small number externalities. From this taxonomy a Pareto welfare model is built with constraints embodying the various types of externalities. The necessary conditions are derived for the various cases of externality problems. Theoretical policy choices are examined for those cases where government intervention is necessary. The model is applied to the South Carolina marshland situation with a number of interesting results. First,if externalities exist between the various types of commercial wildlife,they will be internalized if the lands are competitively leased. The leasees should be allowed to engage in all fishing activities with the possible exception of shrimping. Second,if there are externalities between commercial shellfishing in the marsh and shrimping along the coast, a tax should be levied on the shrimpers and paid to the marsh leaseholders. This tax should be based on the number of shrimp leaving the estuary and should be increased so long as the quality of shrimp increases.