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Fiscal and Economic Aspects of Book Consumption in the European Union

Author

Listed:
  • Karol J. Borowiecki

    () (Department of Business and Economics, University of Southern Denmark, Odense,Denmark)

  • Trilce Navarrete

    () (Department of Business and Economics, University of Southern Denmark, Odense,Denmark)

Abstract

One of the available and yet underappreciated tools in cultural policy at the national level is the reduction of VAT rates for cultural goods and services. We document the standard and reduced VAT rates in EU-28 countries in the period from 1993 to 2013 and explore the underlying determinants. We further introduce a simple theoretical framework to explain how reduced fiscal rates are expected to decrease prices and increase quantities of the consumed cultural goods and services. We then estimate quantitatively that a decrease in the VAT rate for books by one percentage point is associated with an economically significant drop in the price by 2.6 percent. Finally, we show the positive effect of a fiscal rate reduction on the book expenditure of well-off households, where a one percentage point decrease in the VAT rate for books leads to an increase in expenditure by 2.7 percent.

Suggested Citation

  • Karol J. Borowiecki & Trilce Navarrete, 2015. "Fiscal and Economic Aspects of Book Consumption in the European Union," ACEI Working Paper Series AWP-02-2015, Association for Cultural Economics International, revised Apr 2015.
  • Handle: RePEc:cue:wpaper:awp-02-2015
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    File URL: http://www.culturaleconomics.org/awp/AWP-02-2015.pdf
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    References listed on IDEAS

    as
    1. Vidar Ringstad & Knut Løyland, 2006. "The Demand for Books Estimated by Means of Consumer Survey Data," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 30(2), pages 141-155, September.
    2. Volker Kirchberg, 1998. "Entrance Fees as a Subjective Barrier to Visiting Museums," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 22(1), pages 1-13, March.
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    4. Thomas F. Crossley & Hamish Low & Matthew Wakefield, 2009. "The Economics of a Temporary VAT Cut," Fiscal Studies, Institute for Fiscal Studies, vol. 30(1), pages 3-16, March.
    5. Canoy, Marcel & van Ours, Jan C. & van der Ploeg, Frederick, 2006. "The Economics of Books," Handbook of the Economics of Art and Culture, Elsevier.
    6. Françoise Benhamou, 2015. "Fair use and fair competition for digitized cultural goods: the case of eBooks," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 39(2), pages 123-131, May.
    7. Trilce Navarrete & Karol J. Borowiecki, 2015. "Change in access after digitization: Ethnographic collections in Wikipedia," ACEI Working Paper Series AWP-10-2015, Association for Cultural Economics International, revised Oct 2015.
    8. repec:taf:ecinnt:v:26:y:2017:i:3:p:227-246 is not listed on IDEAS
    9. Karol J. Borowiecki & Trilce Navarrete, 2017. "Digitization of heritage collections as indicator of innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(3), pages 227-246, April.
    10. Victoria Ateca-Amestoy, 2008. "Determining heterogeneous behavior for theater attendance," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 32(2), pages 127-151, June.
    11. Schuster, J. Mark, 2006. "Tax Incentives in Cultural Policy," Handbook of the Economics of Art and Culture, Elsevier.
    12. Copenhagen Economics, 2007. "Study on reduced VAT applied to goods and services in the Member States of the EU," Taxation Studies 0018, Directorate General Taxation and Customs Union, European Commission.
    13. Karol Jan Borowiecki, 2015. "Historical origins of cultural supply in Italy," Oxford Economic Papers, Oxford University Press, vol. 67(3), pages 781-805.
    14. Richard Blundell, 2009. "Assessing the Temporary VAT Cut Policy in the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 30(1), pages 31-38, March.
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    16. Juan Prieto-Rodriguez & Desiderio Romero-Jordán & José Felix Sanz-Sanz, 2005. "Is a tax cut on cultural goods consumption actually desirable? A microsimulation analysis applied to Spain," Fiscal Studies, Institute for Fiscal Studies, vol. 26(4), pages 549-575, December.
    17. Trilce Navarrete, 2013. "Digital cultural heritage," Chapters,in: Handbook on the Economics of Cultural Heritage, chapter 12, pages i-i Edward Elgar Publishing.
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    20. Seaman, Bruce A, 2006. "Empirical Studies of Demand for the Performing Arts," Handbook of the Economics of Art and Culture, Elsevier.
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    Citations

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    Cited by:

    1. Karol J. Borowiecki & Catarina Marvao, 2015. "Dance Participation and Attendance in Denmark," ACEI Working Paper Series AWP-01-2015, Association for Cultural Economics International, revised Apr 2015.
    2. Karol J. Borowiecki & Trilce Navarrete, 2017. "Digitization of heritage collections as indicator of innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(3), pages 227-246, April.
    3. Trilce Navarrete & Karol J. Borowiecki, 2015. "Change in access after digitization: Ethnographic collections in Wikipedia," ACEI Working Paper Series AWP-10-2015, Association for Cultural Economics International, revised Oct 2015.

    More about this item

    Keywords

    Cultural consumption; Book markets; Cultural policy; Value added tax; fiscal policy;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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