Estimating structural demand and supply models using tax rates as instruments

• 成果类型: Article
• 署名作者: Dearing, Adam
• 署名单位: Cornell University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2021.104561
• 发表日期: 2022
• 关键词: tax reform; instrumental variable; structural estimation; market power

摘要

We show that variation in a single, generic tax rate can be used to identify and estimate single-good structural models that include general demand and supply specifications and (potential) market power. Our results generalize those of Zoutman et al. (2018a), who consider using a single ad valorem tax rate to identify and estimate constant-elasticity demand and supply functions under perfect competition. We also consider identification and estimation in multiple-good settings, including cases where the number of goods exceeds the number of independently-shifting tax rates. Estimation is straightforward and can be performed via two sequential GMM estimates. (C) 2021 Elsevier B.V. All rights reserved.