IDEAS home Printed from https://ideas.repec.org/p/auu/hpaper/089.html
   My bibliography  Save this paper

The Revenue Maximising Tariff Rate: A Theoretical Model Applied to 1890s Victoria

Author

Listed:
  • William Coleman

Abstract

There is a certain rate of tariff which will maximise the tariff’s revenue. Can theory give any indication as to the actual magnitude of the tariff? The paper develops a simple expression for the revenue maximising tariff rate in terms of the import share, the elasticity of supply of the good, and the elasticity of demand for the good. The model is then applied to an historical episode: the substantial reduction in tariff rates 1895 that were implemented in a previously highly protectionist Victoria by a government hungry for revenue. The model is found to be consonant with the facts of that episode.

Suggested Citation

  • William Coleman, 2020. "The Revenue Maximising Tariff Rate: A Theoretical Model Applied to 1890s Victoria," CEH Discussion Papers 07, Centre for Economic History, Research School of Economics, Australian National University.
    • Handle: RePEc:auu:hpaper:089
    as

    Download full text from publisher

    File URL: https://cbe.anu.edu.au/researchpapers/CEH/WP202007.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Peter Lloyd, 2017. "The First 100 Years of Tariffs in Australia: the Colonies," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 57(3), pages 316-344, November.
    2. Tower, Edward, 1977. "Ranking the optimum tariff and the maximum revenue tariff," Journal of International Economics, Elsevier, vol. 7(1), pages 73-79, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. William Coleman, 2020. "The Impact of the ‘Braddon Blot’ on Australia’s Tariff Structure, 1901-1910: A Leviathanic Analysis," CEH Discussion Papers 10, Centre for Economic History, Research School of Economics, Australian National University.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Seltzer, Andrew, 2024. "The Political Economy of Minimum Wage Setting: The Factories and Shops Act of Victoria (Australia), 1896-1913," IZA Discussion Papers 16788, Institute of Labor Economics (IZA).
    2. Edward Tower, 1988. "Explaining the Yeh Paradox: A Comment [The Maximum Revenue Tariff vs. Transfer Payments]," Eastern Economic Journal, Eastern Economic Association, vol. 14(2), pages 189-192, Apr-Jun.
    3. Andrew Seltzer & Martin Shanahan & Claire Wright, 2022. "The Rise and Fall and Rise (?) of Economic History in Australia," CEH Discussion Papers 05, Centre for Economic History, Research School of Economics, Australian National University.
    4. Post, Gerald Vernon, 1983. "Optimal tariffs and retaliation with perfect foresight," ISU General Staff Papers 198301010800009429, Iowa State University, Department of Economics.
    5. Luke H. Grayson & Brian D. Varian, 2023. "Economic Aspects of Australian Federation: Trade Restrictiveness and Welfare Effects in the Colonies and the Commonwealth, 1901-3," CEH Discussion Papers 01, Centre for Economic History, Research School of Economics, Australian National University.
    6. Brian D. Varian, 2022. "Revisiting the tariff‐growth correlation: The Australasian colonies, 1866–1900," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 62(1), pages 47-65, March.
    7. Yoshitomo Ogawa, 2012. "The structure of Nash equilibrium tariffs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(1), pages 139-161, September.
    8. Anomita Ghosh & Rupayan Pal, 2017. "Welfare Ranking of Alternative Export Taxes Revisited," Economics Bulletin, AccessEcon, vol. 37(2), pages 1033-1044.
    9. Yilmaz, Kamil, 1999. "Optimal export taxes in a multicountry framework," Journal of Development Economics, Elsevier, vol. 60(2), pages 439-465, December.
    10. Kala Krishna, 1998. "The adding up problem: a targeting approach," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 7(2), pages 151-173.
    11. Wang, Leonard F.S. & Lee, Jen-yao, 2014. "Ranking the optimum tariff and the maximum revenue tariff in vertically related markets," Research in Economics, Elsevier, vol. 68(3), pages 222-229.
    12. Anomita Ghosh & Rupayan Pal, "undated". "Welfare ranking of alternative export tariffs revisited," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2015-009, Indira Gandhi Institute of Development Research, Mumbai, India.
    13. Andrew J. Seltzer, 2024. "The Political Economy of Minimum Wage Setting: The Factories and Shops Act of Victoria (Australia), 1896-1913," CEH Discussion Papers 02, Centre for Economic History, Research School of Economics, Australian National University.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:auu:hpaper:089. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/chanuau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.