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Simulation of indirect tax reforms using pooled micro and macro French data

Author

Listed:
  • Véronique Nichèle

    (CORELA - Laboratoire de Recherche sur la Consommation - INRA - Institut National de la Recherche Agronomique)

  • Jean-Marc Robin

    () (LEA - Laboratoire d'Economie Appliquée - INRA - Institut National de la Recherche Agronomique, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique)

Abstract

This paper assesses the consequences of two reforms of the French indirect taxation system: a VAT harmonization which is close to initial EC proposals and a carbon tax which aims at decreasing the emissions of carbon dioxide. We simulate the effects of tax reforms using estimates of a model of household expenditure behaviour. Estimation is obtained by using the property of perfect aggregation over households of the Almost Ideal demand system on pooled micro data from the 1978–1979, 1984–1985, 1989 issues of the French ‘Enquête Budgets des Familles' combined with macro data from the Quarterly National Accounts from 1970 to 1990. Simulations are conducted using a subsample of households from the 1989 consumer survey and generate useful results about the behavioural reactions to tax changes, the impact on government revenue and the distributional effects of the reforms.

Suggested Citation

  • Véronique Nichèle & Jean-Marc Robin, 1995. "Simulation of indirect tax reforms using pooled micro and macro French data," Post-Print hal-00359428, HAL.
  • Handle: RePEc:hal:journl:hal-00359428
    DOI: 10.1016/0047-2727(94)01425-N
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00359428
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    References listed on IDEAS

    as
    1. Laurence Bloch & Françoise Maurel, 1989. "Harmonisation des taux de TVA : scénarios macroéconomiques," Économie et Statistique, Programme National Persée, vol. 217(1), pages 131-143.
    2. Symons, Elizabeth & Walker, Ian, 1989. "The Revenue and Welfare Effects of Fiscal Harmonization for the UK," Oxford Review of Economic Policy, Oxford University Press, vol. 5(2), pages 61-75, Summer.
    3. Muellbauer, John, 1976. "Community Preferences and the Representative Consumer," Econometrica, Econometric Society, vol. 44(5), pages 979-999, September.
    4. King, Mervyn A., 1983. "Welfare analysis of tax reforms using household data," Journal of Public Economics, Elsevier, vol. 21(2), pages 183-214, July.
    5. Jorgenson, Dale W & Lau, Lawrence J & Stoker, Thomas M, 1980. "Welfare Comparison under Exact Aggregation," American Economic Review, American Economic Association, vol. 70(2), pages 268-272, May.
    6. repec:adr:anecst:y:1986:i:2:p:02 is not listed on IDEAS
    7. Michel Lazare & Didier Maillard & Thierry Pujol, 1989. "Les propositions communautaires d'harmonisation de la TVA," Économie et Statistique, Programme National Persée, vol. 217(1), pages 117-125.
    8. John Muellbauer, 1975. "Aggregation, Income Distribution and Consumer Demand," Review of Economic Studies, Oxford University Press, vol. 42(4), pages 525-543.
    9. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
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    Cited by:

    1. Crawford, Ian & Laisney, Francois & Preston, Ian, 2003. "Estimation of household demand systems with theoretically compatible Engel curves and unit value specifications," Journal of Econometrics, Elsevier, vol. 114(2), pages 221-241, June.
    2. repec:eee:chieco:v:46:y:2017:i:s:p:s17-s34 is not listed on IDEAS
    3. Olivier Allais & Patrice Bertail & Véronique Nichèle, 2010. "The Effects of a Fat Tax on French Households' Purchases: A Nutritional Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(1), pages 228-245.
    4. Brännlund, Runar & Nordström, Jonas, 2001. "Modelling Consumer Demand and Household Labour Supply: Welfare Effects of Increasing Carbon Taxes," Umeå Economic Studies 571, Umeå University, Department of Economics.
    5. Kurt Kratena & Ina Meyer & Michael Wüger, 2009. "Economic, Technological and Socio-demographic Factors Impacting on Energy Demand," WIFO Monatsberichte (monthly reports), WIFO, vol. 82(7), pages 525-538, July.
    6. Audrey Berry, 2018. "Compensating households from carbon tax regressivity and fuel poverty: a microsimulation study," CIRED Working Papers hal-01691088, HAL.
    7. Creedy, John & Sleeman, Catherine, 2006. "Carbon taxation, prices and welfare in New Zealand," Ecological Economics, Elsevier, vol. 57(3), pages 333-345, May.
    8. Paolo Liberati, 2001. "The Distributional Effects of Indirect Tax Changes in Italy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(1), pages 27-51, January.
    9. Luc Savard, 2010. "Using an Almost Ideal Demand System in a Macro-Micro Modelling Context to Analyse Poverty and Inequalities," Cahiers de recherche 10-04, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    10. repec:aen:journl:ej38-si1-bohringer is not listed on IDEAS
    11. Jérôme Adda, 2007. "Behavior towards health risks: An empirical study using the “Mad Cow” crisis as an experiment," Journal of Risk and Uncertainty, Springer, vol. 35(3), pages 285-305, December.
    12. Paolo Liberati, 2000. "Did VAT change redistribute purchasing power in Italy?," Working Papers 40, University of Rome La Sapienza, Department of Public Economics.
    13. Toshinobu Matsuda, 2006. "Linear approximations to the quadratic almost ideal demand system," Empirical Economics, Springer, vol. 31(3), pages 663-675, September.
    14. Luc Savard, 2004. "Un système de demandes AIDS dans un contexte EGC microsimulation pour l'analyse de pauvreté et des inégalités," Cahiers de recherche 04-10, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    15. Frank T. Denton & Dean C. Mountain, 2011. "Taxing a Commodity With and Without Revenue Neutrality: An Exploration Using a Calibrated Theoretical Consumer Equilibrium Model," Quantitative Studies in Economics and Population Research Reports 445, McMaster University.
    16. Oya Pinar Ardic & Burcay Erus & Gurcan Soydan, 2010. "An evaluation of indirect taxes in Turkey," Economics Bulletin, AccessEcon, vol. 30(4), pages 2787-2801.
    17. Brannlund, Runar & Nordstrom, Jonas, 2004. "Carbon tax simulations using a household demand model," European Economic Review, Elsevier, vol. 48(1), pages 211-233, February.
    18. Audrey Berry, 2017. "Compensating households from carbon tax regressivity and fuel poverty: a microsimulation study," Policy Papers 2017.08, FAERE - French Association of Environmental and Resource Economists.
    19. Kurt Kratena & Ina Meyer & Michael Wüger, 2009. "Economic, Technological and Socio-demographic Factors of Energy Demand," WIFO Working Papers 339, WIFO.
    20. Miles, Daniel & Delgado, Miguel A., 1996. "Household characteristics and consumption behaviour: a nonparametric approach," DES - Working Papers. Statistics and Econometrics. WS 4539, Universidad Carlos III de Madrid. Departamento de Estadística.
    21. Arabatzis, Garyfallos & Klonaris, Stathis, 2009. "An analysis of Greek wood and wood product imports: Evidence from the linear quadratic aids," Forest Policy and Economics, Elsevier, vol. 11(4), pages 266-270, July.
    22. Romero-Jordán, Desiderio & del Río, Pablo & Jorge-García, Marta & Burguillo, Mercedes, 2010. "Price and income elasticities of demand for passenger transport fuels in Spain. Implications for public policies," Energy Policy, Elsevier, vol. 38(8), pages 3898-3909, August.
    23. Nicolas Ruiz & Alain Trannoy, 2008. "Le caractère régressif des taxes indirectes : les enseignements d'un modèle de microsimulation," Économie et Statistique, Programme National Persée, vol. 413(1), pages 21-46.
    24. repec:eee:eneeco:v:70:y:2018:i:c:p:84-97 is not listed on IDEAS
    25. Frank Denton & Dean Mountain, 2011. "Taxing a Commodity with and without Revenue Neutrality: A Calibrated Theoretical Consumer Equilibrium Model," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 39(3), pages 261-271, September.

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