Relative Efficiency of AD Valorem and Unit Taxes: The Case of Endogenous Quality
AbstractThis article studies the relative efficiency of unit and ad valorem taxes in a competitive market in which the quality of product is endogenous. The author finds that the relative efficiency of these two taxes depends on exactly how individuals value the quality of a product. Specifically, the unit tax welfare dominates the ad valorem tax in the “casket” case and the “full-price” case, whereas the ad valorem tax welfare dominates the unit tax in the “lightbulb” case.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by in its journal Public Finance Review.
Volume (Year): 31 (2003)
Issue (Month): 3 (May)
Contact details of provider:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Laszlo Goerke & Frederik Herzberg & Thorsten Upmann, 2012.
"Failure of Ad Valorem and Specific Tax Equivalence under Uncertainty,"
IAAEU Discussion Papers
201205, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
- Laszlo Goerke & Frederik Herzberg & Thorsten Upmann, 2012. "Failure of Ad Valorem and Specific Tax Equivalence under Uncertainty," CESifo Working Paper Series 3946, CESifo Group Munich.
- Liu, Liqun, 2011. "The Alchian-Allen theorem and the law of relative demand: The case of multiple quality-differentiable brands," Mathematical Social Sciences, Elsevier, vol. 61(1), pages 52-57, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications).
If references are entirely missing, you can add them using this form.