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Goods and Services Tax Effects on Goods and Services Included in the Consumer Price Index Basket

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  • ABBAS VALADKHANI

Abstract

This paper quantifies the magnitude and duration of the goods and services tax (GST) effect on the quarterly growth rate of the 11 groups of the consumer price index (CPI) in Australia using the Box and Tiao intervention analysis. It was found that prices did not increase significantly before or after the introduction of GST, beyond what could have been expected on the basis of the discernible systematic pattern of fluctuation in the data. Furthermore, the varying one‐off effect of GST on prices was significant in seven out of 11 CPI groups; the effect was found insignificant for the other four CPI groups.

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  • Abbas Valadkhani, 2005. "Goods and Services Tax Effects on Goods and Services Included in the Consumer Price Index Basket," The Economic Record, The Economic Society of Australia, vol. 81(s1), pages 104-114, August.
    • Handle: RePEc:bla:ecorec:v:81:y:2005:i:s1:p:s104-s114
    DOI: 10.1111/j.1475-4932.2005.00252.x
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    References listed on IDEAS

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    1. Peter Dawkins & David Johnson, 1998. "The Interaction of Tax and Social Security: Introduction and Overview," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 31(3), pages 258-262, September.
    2. Yu-Jane Liu & Chih-Hsien Yu, 2002. "On the Effect of Stock Stabilization Fund: A Case of Taiwan," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 5(01), pages 93-109.
    3. Abbas Valadkhani & Allan P. Layton, 2004. "Quantifying the Effect of the GST on Inflation in Australia's Capital Cities: An Intervention Analysis," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 37(2), pages 125-138, June.
    4. Ada Ho & Alan Wan, 2002. "Testing for covariance stationarity of stock returns in the presence of structural breaks: an intervention analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 9(7), pages 441-447.
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    Cited by:

    1. John Freebairn, 2016. "A Comparison of Policy Instruments to Reduce Greenhouse Gas Emissions," Economic Papers, The Economic Society of Australia, vol. 35(3), pages 204-215, September.
    2. Allen Huang & Benjamin Liu, 2009. "The Goods and Services Tax (GST) and Non-Bank Lender Mortgage Costs: Empirical Evidence," Discussion Papers in Finance finance:200915, Griffith University, Department of Accounting, Finance and Economics.
    3. Allen Huang & Benjamin Liu, 2013. "The GST and mortgage costs: Australian evidence," Discussion Papers in Finance finance:201302, Griffith University, Department of Accounting, Finance and Economics.
    4. Freebairn, John, 2012. "Tax mix change to reduce greenhouse gas emissions," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(1), pages 1-15, March.
    5. Allen Huang & Benjamin Liu, 2009. "The Goods and Services Tax (GST) and Bank Mortgage Costs: Empirical Evidence," Discussion Papers in Finance finance:200914, Griffith University, Department of Accounting, Finance and Economics.
    6. Allen Huang & Benjamin Liu, 2013. "The Impact of the Goods and Services Tax on Mortgage Costs: Evidence from Australian Mortgage Corporations," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 4(1), pages 54-65, January.

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