The welfare effects of alcohol taxation
This paper analyses the question of how to appropriately tax alcoholic beverages at a disaggregated level. Using the theory of tax reform, the social cost of raising revenue from different alcoholic beverages is calculated. The externality associated with alcohol consumption is explicitly modeled. In conjunction with unusually high wedges between producer and consumer prices, this leads to results rarely encountered in the literature of the welfare effects of taxation. The problem is approached by building a multistage budgeting model of expenditure. This is necessitated by the availability of elasticity information only for aggregates of the goods in question while pricing policy must be developed at a more disaggregated level. The model is applied to a data set for 1989 for the province of Ontario, Canada. We find that there is a major scope for welfare-improving tax changes, but that such changes depend crucially upon the magnitude of the externality associated with alcohol consumption.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:52:y:1993:i:1:p:83-100. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.