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Food expenditure and GST in New Zealand

Author

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  • Christopher Ball
  • John Creedy
  • Michael Ryan

Abstract

This paper investigates the welfare effects on New Zealand households of zero-rating food in a goods and services tax (GST). The detailed effects, for a range of household types, are investigated using Household Economic Survey data. Demand responses to consumer price changes are estimated and welfare changes, in terms of equivalent variations, are obtained. Comparisons are also made across clusters, consisting of groups of households with similar characteristics. A tax change is found to produce a very small amount of progressivity in the GST. Redistribution is from households without children and with high total expenditure to households with children and low total expenditure, and towards older households.

Suggested Citation

  • Christopher Ball & John Creedy & Michael Ryan, 2016. "Food expenditure and GST in New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 50(2), pages 115-128, August.
    • Handle: RePEc:taf:nzecpp:v:50:y:2016:i:2:p:115-128
    DOI: 10.1080/00779954.2014.971480
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    Cited by:

    1. John Creedy & Penny Mok, 2018. "The marginal welfare cost of personal income taxation in New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 52(3), pages 323-338, September.
    2. Thomas, Alastair, 2015. "The Distributional Effects of Consumption Taxes in New Zealand," Working Paper Series 4668, Victoria University of Wellington, Chair in Public Finance.
    3. Thomas, Alastair, 2019. "Who Would Win from a Multi-rate GST in New Zealand: Evidence from a QUAIDS Model," Working Paper Series 8127, Victoria University of Wellington, Chair in Public Finance.
    4. John Creedy & Penny Mok, 2018. "The marginal welfare cost of personal income taxation in New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 52(3), pages 323-338, September.
    5. Thomas, Alastair, 2015. "The Distributional Effects of Consumption Taxes in New Zealand," Working Paper Series 19331, Victoria University of Wellington, Chair in Public Finance.

    More about this item

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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