Do Taxes Produce Better Wine?
AbstractTheory predicts that unit taxes increase the quality consumed in a market, since unit taxes reduce the relative price of high quality goods. Ad valorem taxes, on the other hand, have no effect on relative prices, and should not affect product quality. The hypothesis is tested empirically in the US wine market. I find that the market share of high quality wine is significantly increased by unit taxes, and that there is no significant effect of ad valorem taxes, in accordance with the hypothesis and previous empirical studies.
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Bibliographic InfoArticle provided by De Gruyter in its journal Journal of Agricultural & Food Industrial Organization.
Volume (Year): 9 (2011)
Issue (Month): 1 (December)
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Web page: http://www.degruyter.com
Other versions of this item:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture,"
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