Evaluating the Demand Effects of Alternative Excise Tax Structures for Alcoholic Beverages
The paper is to analyze the inter-industry price and demand effects that were likely to arise from the system of excise tax indexation. The system existed in the period April 1981 to August 1984 in Canada. The paper points out that the unintended cross price effects can be very large when there are large non-neutral unit taxes and the number of commodities in the price index is few.
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