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Redistribution through Commodity Taxes: The Nonlinear Engel Curve Case

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  • Ray, Ranjan

Abstract

This paper attempts to measure the redistributive effects of commodity taxation within a nonlinear Engel curve framework. A recent nonlinear demand system (RNLPS) is estimated on Indian budget data and the parameter estimates are used in conjunction with actual tax rates to quantify possible redistribution. The results point to the very limited redistribution that can be achieved by relying on commodity taxation alone.

Suggested Citation

  • Ray, Ranjan, 1986. "Redistribution through Commodity Taxes: The Nonlinear Engel Curve Case," Public Finance = Finances publiques, , vol. 41(2), pages 277-284.
  • Handle: RePEc:pfi:pubfin:v:41:y:1986:i:2:p:277-84
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