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Socially-Efficient Tax Reforms

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  • Duclos, Jean-Yves
  • Makdissi, Paul
  • Wodon, Quentin

Abstract

We propose graphical methods to determine whether commodity-tax changes are "socially efficient", in the sense of improving social welfare or decreasing poverty for large classes of social welfare and poverty indices. We also derive estimators of critical poverty lines and economic efficiency ratios which can be used to characterize socially-efficient tax reforms. The statistical properties of the various estimators are derived in order to make the method implementable using survey data. The methodology is illustrated using a recently-proposed reform of the Mexican Valued Added Tax system.

Suggested Citation

  • Duclos, Jean-Yves & Makdissi, Paul & Wodon, Quentin, 2002. "Socially-Efficient Tax Reforms," Cahiers de recherche 0201, Université Laval - Département d'économique.
    • Handle: RePEc:lvl:laeccr:0201
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    File URL: http://www.ecn.ulaval.ca/w3/recherche/cahiers/2002/0201.pdf
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    References listed on IDEAS

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    Cited by:

    1. David Madden, 2015. "The Poverty Effects Of A ‘Fat‐Tax’ In Ireland," Health Economics, John Wiley & Sons, Ltd., vol. 24(1), pages 104-121, January.
    2. Sami Bibi & Jean-Yves Duclos, 2007. "Poverty-decreasing indirect tax reforms: Evidence from Tunisia," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(2), pages 165-190, April.
    3. Duclos, Jean-Yves & Makdissi, Paul & Wodon, Quentin, 2003. "Poverty-Efficient Transfer Programs: The Role of Targeting and Allocation Rules," Cahiers de recherche 0305, CIRPEE.
    4. Jean‐Yves Duclos & Paul Makdissi & Quentin Wodon, 2005. "Poverty‐Reducing Tax Reforms with Heterogeneous Agents," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(1), pages 107-116, February.
    5. Pene Kalulumia & Denis Bolduc, 2004. "Generalized Mixed Estimation Of A Multinomial Discretecontinuous Choice Model For Electricity Demand," Cahiers de recherche 04-01, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    6. Pene Kalulumia, 2002. "Effects of government debt on interest rates: evidence from causality tests in johansen-type models," Cahiers de recherche 02-07, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    7. David Madden, 2009. "Distributional Characteristics for Ireland: A Note," Working Papers 200910, School of Economics, University College Dublin.
    8. Duclos, Jean-Yves & Makdissi, Paul & Wodon, Quentin, 2005. "Poverty-dominant program reforms: the role of targeting and allocation rules," Journal of Development Economics, Elsevier, vol. 77(1), pages 53-73, June.
    9. Kebede W. Sindu & Belay Fekadu & Dejene Aredo, 2016. "Impact of Trade Liberalization on Poverty in Ethiopia: A Computable General Equilibrium Microsimulation," International Journal of Microsimulation, International Microsimulation Association, vol. 9(1), pages 109-133.
    10. Quentin Wodon, 2012. "Improving the Targeting of Social Programs in Ghana," World Bank Publications - Books, The World Bank Group, number 13082, December.
    11. Petr Hanel, 2003. "Impact Of Government Support Programs On Innovation By Canadian Manufacturing Firms," Cahiers de recherche 04-02, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    12. Petr Hanel & Snezana VUCIC, 2002. "L’Impact Économique Des Activités De Recherche De L’Université De Sherbrooke," Cahiers de recherche 02-04, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.

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    More about this item

    Keywords

    Social Welfare; Poverty; Efficiency; Tax Reform; Stochastic Dominance;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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