| Sumario: | A discussion of childbearing choices and externalities in a two-generation model of a competitive economy with a pollution externality created by the aggregate consumption of one of two goods. The mixture of a narrow intergenerational concern and a public bad externality gives rise to the result that Pareto efficiency requires not just Pigovian pollution taxes but also a tax per child. The size of this tax approximately equals the present value of the pollution taxes that each descendant will pay. In this instance, as the parent chose to have the child, she should be charged for the externality created by her child.
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