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Szerepel-e az áfacsökkentés az étlapon? A 2016-2017-es magyarországi áfacsökkentések árhatásai
[Does VAT cut appear on the menu? The consumer price impact of Hungarian VAT decreases of 2016-2017]

Author

Listed:
  • Ván, Bálint
  • Olah, Daniel

Abstract

To understand the economic impacts of VAT changes the passthrough to consumer prices should be analyzed. The main objective of the study is to examine the passthrough with the rarely used method of synthetic controls for Hungarian VAT changes in 2016-2017. Synthetic price indices are created from the price indices of the same consumer expenditure categories of different European countries. The study finds almost full passthrough in case of pork and chicken while the passthrough is only partial for fresh milk and eggs. The primarily analyzed Hungarian VAT changes of 2016-2017 have not been reflected in the consumer prices of the restaurant sector. The price impacts for food items are in line with the experiences of the Romanian decrease of VAT in 2015. Analyzing the earlier Hungarian and international passthrough rates of the restaurant sector with the synthetic control method we can state that this sector is characterized by strong asymmetric passthrough. VAT increases are fully transferred to consumer prices while this is not the case for VAT decreases.

Suggested Citation

  • Ván, Bálint & Olah, Daniel, 2018. "Szerepel-e az áfacsökkentés az étlapon? A 2016-2017-es magyarországi áfacsökkentések árhatásai [Does VAT cut appear on the menu? The consumer price impact of Hungarian VAT decreases of 2016-2017]," MPRA Paper 88165, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:88165
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    Cited by:

    1. Maximilian Joseph Blömer & Przemyslaw Brandt & Mosler Martin & Andreas Peichl, 2021. "Distributional Effects of the Child Bonus and the Temporary Reduction in VAT in 2020," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 74(02), pages 45-50, February.

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    More about this item

    Keywords

    VAT; passthrough; synthetic control; taxation;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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