OPTIMAL COMMODITY TAXATION AND HOUSEHOLD CONSUMPTION ACTIVITIES

This article reexamines the Ramsey tax problem using Becker's househol d-production approach. It assumes that market-purchased goods and time are used in fixed but different proportions in generating consumption activities. It derives a generalized version of Atkinson and Stiglitz 's findings regarding the relationship between optimal tax rates and t he structure of preferences (for consumption activities). It then reex amines their three main results in this regard.