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Resource Rents, Cost Differences and Fiscal Equalization *
Author(s) -
PETCHEY JEFFREY
Publication year - 1995
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1995.tb02679.x
Subject(s) - economic rent , equalization (audio) , resource (disambiguation) , economics , production (economics) , natural resource economics , diversity (politics) , state (computer science) , public economics , microeconomics , computer science , telecommunications , computer network , channel (broadcasting) , algorithm , sociology , anthropology
It has been argued that the fiscal equalization process in Australia, which transfers wealth between States, has efficiency costs. Here, I show that equalization transfers can be efficiency enhancing. Further, it is shown that under certain assumptions about inter‐state differences in costs of production and resource endowments, such transfers may need to favour relatively high cost and resource rich States, such as Western Australia and Queensland, while under other assumptions about diversity, they should favour relatively resource poor and low cost States, such as Victoria and New South Wales.