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1 edition of The comparison between ad valorem and specific taxation under imperfect competition found in the catalog.

The comparison between ad valorem and specific taxation under imperfect competition

Sofia Delipalla

The comparison between ad valorem and specific taxation under imperfect competition

by Sofia Delipalla

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  • 23 Currently reading

Published by Institute for Economic Research, Queen"s University in Kingston, Ont .
Written in English


Edition Notes

Statementby Sofia Delipalla and Michael Keen
SeriesDiscussion paper -- no. 821, Discussion paper (Queen"s University (Kingston, Ont.). Institute for Economic Research) -- no. 821.
ContributionsKeen, Michael, Queen"s University (Kingston, Ont.). Institute for Economic Research
The Physical Object
Pagination28 p. :
Number of Pages28
ID Numbers
Open LibraryOL26556530M

The comparison between ad valorem and specific taxation under imperfect competition. Michael Keen and Delipalla, S. Journal article | Journal of Public Economics 01 Jan Share. Related Information. Volume, issue, pages: Vol. 49, pp Published in Cited by: @inproceedings{derTheCB, title={The Comparison between Ad Valorem and Unit Taxes under Monopolistic Competition}, author={Philipp J. H. Schr der}, year={} } Philipp J. H. Schr der Published Economics Systems and methods for radio access interfaces in accordance with embodiments of the.

  The ad valorem versus unit tax debate has traditionally emphasized tax yield. On 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. However, in a number of policy fields such as environmental, health, and trade economics, policy makers use taxes to reduce the. 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.

1. Introduction. Competition policy and tax policy are two important issues for governments. To better understand how these two policies are connected, this paper investigates the relationship between competition and welfare under both an ad valorem tax and a unit tax. specific or predominantly ad valorem. The comparison between ad valorem and specific taxes is thus of continuing policy relevance. The comparison is also one of continuing intellectual interest. It is both one of the oldest issues in the formal study of public finance and one in which recent years have seen significant new developments.


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The comparison between ad valorem and specific taxation under imperfect competition by Sofia Delipalla Download PDF EPUB FB2

In the model of Free Entry Oligopoly, a P-shift from specific to ad valorem taxation leads to: (a) a strict reduction in the consumer price, and (b) a strict reduction in the number of active firms, except in the polar case of joint profit maximisation (in which it is unaffected).

by: Ad valorem taxation dominates specific taxation from the welfare perspective: the set of circumstances under which (with free entry) specific taxation raises welfare is a strict subset of that in which ad valorem taxation is welfare-improving, and in both models the maximisation of consumer welfare subject to a binding revenue constraint requires maximum reliance on ad valorem by: The comparison between ad valorem and specific taxation under imperfect competition.

Ad valorem taxation dominates specific from the welfare perspective: the set of circumstances under which (with free entry) specific taxation raises welfare is a strict subset of that in which ad valorem taxation is welfare-improving, and in both models the maximization of consumer welfare subject to a binding revenue constraint requires maximum reliance on ad valorem taxation.

specific and ad valorem tax is equal to, the “mark-up” parameter. Under perfect competition this parameter is equal to one and we have the well known result that the two taxes have equivalent effects on price in a competitive environment. However, with imperfect.

The Comparison Between Ad Valorem and Specific Taxation under Imperfect Competition: Evidence from the European Cigarette Industry.

The Comparison Between Ad Valorem and Specific Taxation under Imperfect Competition: Evidence from the European Cigarette Industry. Sophia Delipalla and Owen O'Donnell. Studies in Economics from School of Economics, University of Kent.

Abstract: Recent theoretical work has shown that the incidence of ad valorem and specific taxes may differ and each may be over or under Cited by: 8.

This paper compares ad valorem and specific taxation in two models of oligopoly, with and without free entry. Predominantly ad valorem taxation implies a relative low consumer price, high tax revenue and (when entry is precluded) low profits. Recent theoretical work has shown that the incidence of ad valorem and specific taxes may differ and each may be over or under-shifted onto consumers in the presence of imperfect competition.

Empirical comparison of the price effects of the two taxes is limited. There are no previous estimates of these effects derived from data displaying reasonable variation in both types of taxes. The majority of the recent articles compare ad valorem and unit taxesfrom various perspectives like welfare dominance under imperfect competition (Galera et al.

), tax pass-through in. Downloadable. Author(s): Sofia Delipalla & Michael Keen. Abstract: This paper compares ad valorem and specific taxation in two models of oligopoly, with and without free entry.

Predominantly ad valorem taxation implies a relative low consumer price, high tax revenue and (when entry is precluded) low profits. Ad valorem taxation dominates specific from the welfare perspective: the set of.

Efficiency comparison of ad valorem and unit taxes has been traditionally based on consumer welfare. However, if the tax instrument also affects the distribution of firms over their productivities.

This paper shows that the welfare dominance of ad valorem over unit taxes under imperfect competition, extends to a Dixit-Stiglitz-type monopolistic competition framework with differentiated products, increasing returns to scale, entry/exit and love of variety.

This result is obtained, even though ad valorem taxation leads to increased firm exit compared to the equal-yield unit tax. The Comparison Between Ad Valorem and Specific Taxation under Imperfect Competition Sofia Delipalla Michael Keen Department of Economics Queen’s University 94 University Avenue Kingston, Ontario, Canada K7L 3N6 Created Date.

An increase in either tax rate leads to a higher usage fee for all consumers, whereas the fixed fee under reasonable assumptions will fall. If the government changes the mix of taxes in such a way that the firm’s behavior is unchanged, a system of wholly ad valorem taxation generates higher tax revenue than does a system of wholly specific taxes.

With this difference, we show that in imperfectly competitive markets (i) if per-unit taxes are the same, output will be larger under ad valorem taxation, and (ii) specific taxation may be. Quality Choice of a Consumer, Specific Tax, Ad-Valorem Tax, Substitution Effect, Welfare Comparison 1.

Introduction In the field of public finance, there are many studies that compare social welfare under ad-valorem and specific taxation. The seminal contribution of[1] examines the impact of two different tax structures on welfare keeping the same.

"The Comparison between Ad Valorem and Specific Taxation under Imperfect Competition," Journal of Public Econom – Google Scholar Laussel, D. and M. Le Breton. The comparison between specific (per unit) and ad valorem (percentage) taxation has been one of the oldest issues in public finance.

In Cournot markets, with deterministic costs structures, conventional wisdom has it that ad valorem taxation tax-revenue dominates specific. It is shown that in the presence of uncertainty, regarding firms’ cost structures, and under reasonable conditions, the.

Recent theoretical work has shown that the incidence of ad valorem and specific taxes may differ and each may be over or under-shifted onto consumers in the presence of imperfect competition. Empirical comparison of the price effects of the two taxes is : Sophia Delipalla and Owen O&#;Donnell.

Recent theoretical work has shown that the incidence of ad valorem and specific taxes may differ and each may be over or under-shifted onto consumers in the presence of imperfect competition.

Empirical comparison of the price effects of the two taxes is by: 8.S. Delipalla, M. KeenThe comparison between ad valorem and specific taxation under imperfect competition Journal of Public Economics, 49 (3) (), pp. Google Scholar. The comparison between ad valorem and specific taxation under imperfect competition Ma Understanding tobacco industry pricing strategy and whether it undermines tobacco tax policy: The example of the UK cigarette market.