Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273681 
Year of Publication: 
2022
Series/Report no.: 
Working Papers in Economics and Statistics No. 2022-08
Publisher: 
University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon), Innsbruck
Abstract: 
This paper shows that a transaction tax makes trades in decentralized markets more information sensitive and enlarges the range of information costs for which the equilibrium exhibits private information acquisition and endogenous adverse selection. A transaction tax reduces the probability of trade. The opposite implications hold for a tax on capital gains. The theoretical implications of a transaction tax are tested using a tax policy change in one segment of Singapore's housing market. Using various proxies for information sensitivity, the triple difference-in-difference analysis shows that a higher transaction tax reduces turnover more strongly when trades are more information sensitive.
Subjects: 
Bargaining
information acquisition
taxation
transaction tax
capital gains tax
tax incidence
decentralized markets
housing markets
policy experiment
information sensitivity
JEL: 
C78
D82
D83
G18
H20
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.