Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/271539 
Year of Publication: 
2012
Citation: 
[Journal:] Economic Modelling [ISSN:] 1873-6122 [Volume:] 29 [Issue:] 2 [Publisher:] Elsevier [Place:] Amsterdam [Year:] 2012 [Pages:] 166-177
Publisher: 
Elsevier, Amsterdam
Abstract: 
This paper provides a comparative static analysis of farm household's production, consumption, and labor market decisions under alternative tax policies. We explore the implications of non-separable household decisions caused by widespread non-participation in labor, land, financial and/or food markets, as is typical of low income economies. The analytical results indicate that when labor market imperfections occur, most tax-induced responses are ambiguous, mainly due to shadow price effects. This is particularly the case for the labor market and production responses to most tax tools under study, while a decreasing demand for consumption goods appears to be the result in several cases. Furthermore, tax-induced allocation effects may differ between the non-separable and the separable model versions, indicating the potential impact of labor market constraints on farm household responses to tax policies. In particular, standard taxes as well as a land tax may imply production adjustments in the case of non-separability.
Subjects: 
agricultural household model
non-separability
taxation
JEL: 
H20
H31
Q12
Published Version’s DOI: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)

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