Please use this identifier to cite or link to this item:
http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18385| Title: | Corrective Ad Valorem and Unit Taxes: A Welfare Comparison |
| Keywords: | H23 L13 ddc:330 Externalities Monopolistic competition Taxes Specific Taxes Welfare |
| Issue Date: | 16-Oct-2013 |
| Publisher: | Deutsches Institut für Wirtschaftsforschung (DIW) Berlin |
| Description: | The ad valorem versus unit taxes debate has traditionally emphasized tax yield. For this criterion, ad valorem taxes outperform unit taxes in terms of welfare for a wide range of imperfect competition settings, including Dixit-Stiglitz monopolistic competition. Yet, in a number of policy fields, such as environmental, health or trade economics, policy makers apply taxes to target the production/consumption volume in an industry, i.e. aim at a certain corrective effect rather than tax yield. This paper compares the two tax instruments with respect to equal corrective-effect in a Dixit-Stiglitz setting with love of variety, entry, exit, and redistribution of tax revenues. We find that unit taxes lead to more firms in the industry, less output per firm, less tax revenue, but higher welfare compared to ad valorem taxes. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18385 |
| Other Identifiers: | http://hdl.handle.net/10419/18385 ppn:505101815 |
| Appears in Collections: | EconStor |
Files in This Item:
There are no files associated with this item.
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.