Optimal commodity grouping in a partial equilibrium framework
This note characterizes, in a partial equilibrium economy with a single agent, which commodities should be taxed whenever there is only one available tax rate. We show that commodities with low price elasticities should be imposed; luxuries are eventually exempted.
|Date of creation:||2004|
|Date of revision:|
|Publication status:||Published in Economics Letters, Elsevier, 2004, 83 (1), pp.49-54. <10.1016/j.econlet.2003.09.026>|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00106895|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Baumol, William J & Bradford, David F, 1970. "Optimal Departures from Marginal Cost Pricing," American Economic Review, American Economic Association, vol. 60(3), pages 265-83, June.
- Gordon, James P. F., 1989. "Tax reform via commodity grouping," Journal of Public Economics, Elsevier, vol. 39(1), pages 67-81, June.
- Yitzhaki, Shlomo, 1979. "A Note on Optimal Taxation and Administrative Costs," American Economic Review, American Economic Association, vol. 69(3), pages 475-80, June.
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