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A General Equilibrium Model of Optimal Alcohol Taxation in the Czech Republic

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  • Karel Janda

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic
    Department of Banking and Insurance, Faculty of Finance and Accounting, University of Economics, Namesti Winstona Churchilla 4, 13067 Prague, Czech Republic)

  • Zuzana Lajksnerova

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)

  • Jakub Mikolasek

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)

Abstract

This paper provides a general equilibrium theoretical model of alcohol taxation and empirically estimates this model. For this purpose, we use a model determined by both externality corrections and fiscal considerations as the tax increase is assumed to immediately change other governmental policies such as labour taxation or medical expenditures. The results of our analysis show that under the most of parametric scenarios the current Czech tax rate on beer and wine is below its optimal level and that the fiscal component has a significant impact on the optimal level of tax.

Suggested Citation

  • Karel Janda & Zuzana Lajksnerova & Jakub Mikolasek, 2018. "A General Equilibrium Model of Optimal Alcohol Taxation in the Czech Republic," Working Papers IES 2018/08, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Mar 2018.
    • Handle: RePEc:fau:wpaper:wp2018_08
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    References listed on IDEAS

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    More about this item

    Keywords

    Alcohol; Beer; Wine; Czech Republic; Elasticity; Price; Social costs; Tax;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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