Tax incidence with strategic firms in the soft drink market

• 成果类型: Article
• 署名作者: Bonnet, Celine; Requillart, Vincent
• 署名单位: Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics; INRAE; Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics; INRAE
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2013.06.010
• 发表日期: 2013
• 页码: 77-88
• 关键词: excise tax; ad valorem tax; tax incidence; Strategic pricing; differentiated products; Soft drinks

摘要

Because soft drink (SD) consumption is considered to be a contributor to the 'epidemic' of obesity, there is a growing interest in evaluating the impact on SD consumption of alternative tax policies. In this paper, we propose a methodology to evaluate the impact of taxation of a food market taking into account the strategic price response of both manufacturers and retailers. We apply this methodology to the French SD market and simulate the impacts of ad valorem and excise taxes. We find that firms behave differently when facing an ad valorem tax or an excise tax. An excise tax is overshifted to consumer prices while an ad valorem tax is undershifted to consumer prices. We find that an excise tax based on the sugar content of SD is the most effective at reducing SD consumption. Our results also indicate that ignoring strategic pricing by firms leads to misestimations of the impact of taxation by between 15% and 40% depending on the products and the tax implemented. In the short-term, that is, ignoring positive long-term health effects, a is an element of 9 cents/1 excise tax has a small negative welfare effect (about El/person/year). (C) 2013 Elsevier B.V. All rights reserved.