The non-optimality of the Mexican indirect tax system
AbstractThis paper starts with a review of the marginal tax reform methodology that was first advanced by Ahmad and Stern (1984), as well as its second-order variant introduced by Urzúa (2005). After that, it reviews some aspects of the estimation of demand systems, a topic that, although well known to applied econometricians, might be unfamiliar to practitioners. Finally, using an estimated demand system, the paper identifies marginal and second-order improvements in the current Mexican indirect tax system. For the non-experts, an appendix provides a computer code in Stata that can be used to estimate demand systems of the type considered here.
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 InfoPaper provided by Tecnológico de Monterrey, Campus Ciudad de México in its series EGAP Working Papers with number 2011-02.
Date of creation: Jul 2011
Date of revision:
Mexico; microsimulation models; marginal tax reform; Ahmad-Stern; social welfare; demand systems;
Other versions of this item:
- Castañon-Herrera, Alberto & Urzúa, Carlos M., 2012. "The non-optimality of the Mexican indirect tax system," EGAP Chapters, in: Fiscal Inclusive Development: Microsimulation Models for Latin America Tecnológico de Monterrey, Campus Ciudad de México.
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
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.:
- Jorge N. Valero Gil, 2006. "Estimación de elasticidades e impuestos óptimos a los bienes más consumidos en México," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 21(2), pages 127-176.
- Ian Crawford & François Laisney & Ian Preston, 2002.
"Estimation of household demand systems with theoretically compatible Engel curves and unit value specifications,"
IFS Working Papers
W02/17, Institute for Fiscal Studies.
- Crawford, Ian & Laisney, Francois & Preston, Ian, 2003. "Estimation of household demand systems with theoretically compatible Engel curves and unit value specifications," Journal of Econometrics, Elsevier, vol. 114(2), pages 221-241, June.
- Preston, Ian & Laisney, François & Crawford, Ian A., 2002. "Estimation of Household Demand Systems with Theoretically Compatible Engel Curves and Unit Value Specifications," ZEW Discussion Papers 97-06 [rev.], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Nicita, Alessandro, 2004. "Efficiency and equity of a marginal tax reform - income, quality, and price elasticities for Mexico," Policy Research Working Paper Series 3266, The World Bank.
- Lahatte, Agenor & Miquel, Ruth & Laisney, Francois & Preston, Ian, 1998.
"Demand systems with unit values:: A comparison of two specifications,"
Elsevier, vol. 58(3), pages 281-290, March.
- Lahatte, Agénor & Miquel, Ruth & Laisney, François & Preston, Ian, 1997. "Demand Systems with Unit Values: A Comparsion of Two Specifications," ZEW Discussion Papers 97-24, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Deaton, Angus, 1987. "Estimation of own- and cross-price elasticities from household survey data," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 7-30.
- J. Scott Shonkwiler & Steven T. Yen, 1999. "Two-Step Estimation of a Censored System of Equations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 972-982.
- Bev Dahlby, 2008. "The Marginal Cost of Public Funds: Theory and Applications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262042509, January.
- Ray, Ranjan, 1983. "Measuring the costs of children : An alternative approach," Journal of Public Economics, Elsevier, vol. 22(1), pages 89-102, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amaranta Arroyo).
If references are entirely missing, you can add them using this form.