IDEAS home Printed from https://ideas.repec.org/a/bla/randje/v57y2026i1p3-15.html

Ad Valorem Taxation in a Multiproduct Monopoly

Author

Listed:
  • Anna D'Annunzio
  • Antonio Russo

Abstract

We study the pass‐through of ad valorem taxes with a multiproduct monopolist. We characterize two mechanisms whereby an ad valorem tax on one good reduces all prices (Edgeworth's paradox), depending on the goods being substitutes or complements. We also find that the tax can increase the supply of all goods. Hence, consumer surplus and welfare can increase even when the goods are underprovided compared to the social optimum. We provide several applications where these results hold. Our findings indicate that in a multiproduct setting the effects of unit and ad valorem taxes on market outcomes and welfare are fundamentally different.

Suggested Citation

  • Anna D'Annunzio & Antonio Russo, 2026. "Ad Valorem Taxation in a Multiproduct Monopoly," RAND Journal of Economics, RAND Corporation, vol. 57(1), pages 3-15, March.
    • Handle: RePEc:bla:randje:v:57:y:2026:i:1:p:3-15
    DOI: 10.1111/1756-2171.70025
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1756-2171.70025
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1756-2171.70025?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:randje:v:57:y:2026:i:1:p:3-15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/randdus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.