Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105526
Authors: 
Delipalla, Sophia
O'Donnell, Owen
Year of Publication: 
1999
Series/Report no.: 
Department of Economics Discussion Paper, University of Kent 9901
Abstract: 
Recent theoretical work has shown that the incidence of ad valorem and specific taxes may differ and each may be over or under-shifted onto consumers in the presence of imperfect competition. These results are used to derive a method of estimating market power and conduct. An application is made to the European cigarette industry. Previous empirical comparison of the price effects of ad valorem and specific taxes is limited. For a group of countries with broadly similar cigarette industries, there is evidence of undershifting of both taxes, with the specific tax having a significantly greater impact on price. The extremes of both perfect competition and monopoly can be rejected. Behaviour is no less competitive than the equivalent of Cournot.
Subjects: 
Tax Incidence
Commodity Taxation
Market Power
Mark-up
Conjectural Variations
Cigarettes
JEL: 
H22
L13
L66
Document Type: 
Working Paper

Files in This Item:
File
Size
91.81 kB





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