Optimal commodity grouping in a partial equilibrium framework

This note characterizes, in a partial equilibrium economy with a single agent, which commodities should be taxed whenever there is only one available tax rate. We show that commodities with low price elasticities should be imposed; luxuries are eventually exempted.

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Bibliographische Detailangaben
Veröffentlicht in:	Economics letters 2004-04, Vol.83 (1), p.49-54
Hauptverfasser:	Belan, Pascal, Gauthier, Stéphane
Format:	Artikel
Sprache:	eng
Schlagworte:	Business studies Commodities Commodity grouping Economic analysis Economics Economics and Finance Fiscal policy Humanities and Social Sciences Indirect taxation Optimal indirect taxation Optimal taxation Taxation
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Beschreibung
Zusammenfassung:	This note characterizes, in a partial equilibrium economy with a single agent, which commodities should be taxed whenever there is only one available tax rate. We show that commodities with low price elasticities should be imposed; luxuries are eventually exempted.
ISSN:	0165-1765 1873-7374
DOI:	10.1016/j.econlet.2003.09.026