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Is A Tax Cut On Cultural Goods Consumption Actually Desirable?:A Microsimulation Analysis

Author

Listed:
  • Juan Prieto-Rodriguez

    (Universidad de Oviedo & IEF)

  • Desiderio Romero-Jordan

    (IEF & Universidad Rey Juan Carlos)

  • Jose Felix Sanz-Sanz

    (IEF & Universidad Complutense de Madrid)

Abstract

Proposals for tax cuts on cultural goods represent an ongoing debate in cultural policy. The main aim of this paper is to shed some light on this debate using microsimulation tools. First, we have estimated an Almost Ideal Demand System for nineteen different groups of goods, including cultural goods. Expenditure and price elasticities have been obtained from this model. Using this information, three alternatives cuts in the V.A.T. rate on cultural goods have been microsimulated and evaluated in terms of revenue and welfare. These types of fiscal reforms will lead to welfare and efficiency gains that can be described as regressive.

Suggested Citation

  • Juan Prieto-Rodriguez & Desiderio Romero-Jordan & Jose Felix Sanz-Sanz, 2004. "Is A Tax Cut On Cultural Goods Consumption Actually Desirable?:A Microsimulation Analysis," Public Economics 0402001, University Library of Munich, Germany, revised 06 Feb 2004.
    • Handle: RePEc:wpa:wuwppe:0402001
    Note: Type of Document - pdf; prepared on WinXP; pages: 23
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/pe/papers/0402/0402001.pdf
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    References listed on IDEAS

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    6. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762.
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    Cited by:

    1. Nisreen Salti & Jad Chaaban, 2010. "On The Poverty And Equity Implications Of A Rise In The Value Added Tax: A Microeconomic Simulation For Lebanon," Middle East Development Journal (MEDJ), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 121-138.

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    More about this item

    Keywords

    Microsimulation; tax reforms; cultural consumption; welfare;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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