Taxation and Pricing of Agricultural and Industrial Goods
This paper presents an analysis of price reform and of optimal pricing and taxation of agricultural and industrial goods in modern-day LDCs. Our analysis is based on a general equilibrium paradigm with a multitude of goods and income groups. It is consistent with several alternative institutional structures with in the agricultural and the industrial sectors, as well as with alternative hypotheses concerning unemployment and migration of labor across the two sectors.This approach differs substantially from the standard tax literature with regard to the structure of the economy and the set of admissible taxes.The rules of price reform which we derive are quite simple to implement, requiring only the knowledge of observable parameters such as price elasticities of demand and supply. The determination of optimal prices (and taxes) requires, in addition, the relative welfare weights on individuals' incomes and on investment. We show that it is desirable, ingeneral, to levy import and export taxes. Among new results are those presenting conditions under which all of the goods belonging to certain categories (such as all purchased agricultural inputs or all agricultural outputs which are not consumed) should be either taxed or stibsidized.
|Date of creation:||Apr 1984|
|Date of revision:|
|Publication status:||published as "The Taxation and Pricing of Agricultural and Industrial Goods in Developing Economies." From The Theory of Taxation for Developing Countries, edited by David Newbery and Nicholas Stern, pp. 426-461, Oxford: Oxford University Press, 1987.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
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.:
- Newbery, David, 1974. "The Robustness of Equilibrium Analysis in the Dual Economy," Oxford Economic Papers, Oxford University Press, vol. 26(1), pages 32-41, March.
- Feldstein, Martin S, 1972. "Distributional Equity and the Optimal Structure of Public Prices," American Economic Review, American Economic Association, vol. 62(1), pages 32-36, March.
- Dixit, Avinash & Stern, Nicholas, 1974. "Determinants of Shadow Prices in Open Dual Economies," Oxford Economic Papers, Oxford University Press, vol. 26(1), pages 42-53, March.
- Dixit, Avinash, 1971. "Short-run Equilibrium and Shadow Prices in the Dual Economy," Oxford Economic Papers, Oxford University Press, vol. 23(3), pages 384-400, November.
- J. A. Mirrlees, 1972. "On Producer Taxation," Review of Economic Studies, Oxford University Press, vol. 39(1), pages 105-111.
- Newbery, David M G, 1972. "Public Policy in the Dual Economy," Economic Journal, Royal Economic Society, vol. 82(326), pages 567-90, June.
- Dixit, Avinash K., 1969. "Marketable surplus and dual development," Journal of Economic Theory, Elsevier, vol. 1(2), pages 203-219, August.
- Newbery, David M, 1989. "The Theory of Food Price Stabilisation," Economic Journal, Royal Economic Society, vol. 99(398), pages 1065-82, December.
- Atkinson, A. B. & Stiglitz, J. E., 1976. "The design of tax structure: Direct versus indirect taxation," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 55-75.
- Feldstein, Martin S, 1977. "The Surprising Incidence of a Tax on Pure Rent: A New Answer to an Old Question," Journal of Political Economy, University of Chicago Press, vol. 85(2), pages 349-60, April.
- Mirrless, J. A., 1975. "Optimal commodity taxation in a two-class economy," Journal of Public Economics, Elsevier, vol. 4(1), pages 27-33, February.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:1338. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.