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Alcohol policy harmonization and trade liberalization in the Nordic countries

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  • Pasi Holm

    (Government Institute for Economic Research)

Abstract

In this paper, a partial equilibrium analysis is used to evaluate consequences of a partial alcohol policy harmonization and a trade liberalization in the Nordic countries. The former will reduce alcoholic beverage taxes and the latter will increase imports of alcoholic beverages. The effects on welfare contributed by the alcohol sector depend on three factors: firstly, whether the import restriction is implemented through quota or voluntary import restriction set by the EU; secondly, how a public monopoly producing an externality generating commodity behaves, i.e. is a public firm e.g. welfare or profit maximizer?; and thirdlY, whether alcohol taxation in the EU is higher or lower than its Pigovian level in the Nordic countries.

Suggested Citation

  • Pasi Holm, 1995. "Alcohol policy harmonization and trade liberalization in the Nordic countries," Finnish Economic Papers, Finnish Economic Association, vol. 8(1), pages 17-24, Spring.
  • Handle: RePEc:fep:journl:v:8:y:1995:i:1:p:17-24
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    1. Delipalla, Sofia & Keen, Michael, 1992. "The comparison between ad valorem and specific taxation under imperfect competition," Journal of Public Economics, Elsevier, vol. 49(3), pages 351-367, December.
    2. Holm, Pasi & Suoniemi, Ilpo, 1992. " Empirical Application of Optimal Commodity Tax Theory to Taxation of Alcoholic Beverages," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(1), pages 85-101.
    3. F. H. Hahn, 1962. "The Stability of the Cournot Oligopoly Solution," Review of Economic Studies, Oxford University Press, vol. 29(4), pages 329-331.
    4. Eldor, Rafael & Levin, Dan, 1990. "Trade Liberalization and Domestic Monopoly: A Welfare Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(4), pages 773-782, November.
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