Firm types, price-setting strategies, and consumption-tax incidence

• 成果类型: Article
• 署名作者: Harju, Jarkko; Kosonen, Tuomas; Skans, Oskar Nordstrom
• 署名单位: VATT Institute for Economic Research; Research Council of Finland; Uppsala University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2018.06.006
• 发表日期: 2018
• 页码: 48-72
• 关键词: Firm types; VAT incidence; Price setting; Restaurants

摘要

We analyze price responses to large restaurant VAT rate reductions in two different European countries. Our results show that responses in the short and medium run were clustered around two focal points of zero pass-through and full pass-through. Differences between independent restaurants and chains is the key explanation for this pattern. While nearly all independent restaurants effectively ignored the tax reductions and left consumer prices unchanged, a substantial fraction of restaurants belonging to chains chose a rapid and complete pass-through. In the longer run, prices converged, but primarily through a price reversion among chain restaurants. The stark difference in price responses does not appear to arise because of different market characteristics such as location, initial price levels, meal types and restaurant segment. (C) 2018 Elsevier B.V. All rights reserved.