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The (Retail) Price of Inequality

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  • Frankel, D.M.

Abstract

A panel study reveals that an increase in pretax income equality leads to sudstantially lower retail prices. Prices also fall if the income tax on high income families is raised. One explanation is that equality makes consumer demand more elastic. This would imply that progressive taxation helps reduce the distortions that come from imperfect competition in retail markets.

Suggested Citation

  • Frankel, D.M., 1996. "The (Retail) Price of Inequality," Papers 23-96, Tel Aviv.
    • Handle: RePEc:fth:teavfo:23-96
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    References listed on IDEAS

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    More about this item

    Keywords

    RETAIL TRADE; PRICES; TAXES; INCOME;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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