Miravete Marín, Eugenio J.
Market power and the Laffer curve / Eugenio J. Miravete, Katja Seim, Jeff Thurk .-- , 2018
Disponible también en formato electrónico a través de la Biblioteca del IEF.
Resumen.
Bibliografía.
We study commodity taxation and characterize the Laffer curve, a trade-off between tax rates and revenue, in noncompetitive markets. Pricing in these markets leads to incomplete tax pass-through and agents re optimize their purchase and pricing decisions in response to any tax change. We use detailed data from Pennsylvania, a state that monopolizes retail sales of alcoholic beverages, to estimate a model of demand for
horizontally differentiated products that ties consumers’ demographic characteristics to heterogeneous preferences for spirits.We find that under the state’s current tax policy,
spirits are overpriced. Distillers respond to decreases in the tax rate by increasing wholesale prices, which limits the state’s revenue gain to only 13% of the incremental tax revenue predicted under the common assumption of perfect competition. The strategic response of noncompetitive firms to changes in taxation therefore flattens the Laffer curve significantly.
PRODUCTOS
IMPUESTOS
PRECIOS
MERCADO
CURVA DE LAFFER
Seim, Katja
Thurk, Jeff
Econometrica : Journal of the Econometric Society 0012-9682 [papel] v. 86, n. 5, September 2018, p. 1651-1687
Market power and the Laffer curve / Eugenio J. Miravete, Katja Seim, Jeff Thurk .-- , 2018
Disponible también en formato electrónico a través de la Biblioteca del IEF.
Resumen.
Bibliografía.
We study commodity taxation and characterize the Laffer curve, a trade-off between tax rates and revenue, in noncompetitive markets. Pricing in these markets leads to incomplete tax pass-through and agents re optimize their purchase and pricing decisions in response to any tax change. We use detailed data from Pennsylvania, a state that monopolizes retail sales of alcoholic beverages, to estimate a model of demand for
horizontally differentiated products that ties consumers’ demographic characteristics to heterogeneous preferences for spirits.We find that under the state’s current tax policy,
spirits are overpriced. Distillers respond to decreases in the tax rate by increasing wholesale prices, which limits the state’s revenue gain to only 13% of the incremental tax revenue predicted under the common assumption of perfect competition. The strategic response of noncompetitive firms to changes in taxation therefore flattens the Laffer curve significantly.
PRODUCTOS
IMPUESTOS
PRECIOS
MERCADO
CURVA DE LAFFER
Seim, Katja
Thurk, Jeff
Econometrica : Journal of the Econometric Society 0012-9682 [papel] v. 86, n. 5, September 2018, p. 1651-1687