Estimating tax incidence, market power and market conduct: The European cigarette industry
- 作者：Delipalla ; Sophia ; O’ ; Donnell ; Owen
- 关键词：Commodity taxation ; Tax incidence ; Market power ; Conjectural variations ; Conduct parameter ; Cigarettes ; H22 ; L13 ; L66
- 刊名：International Journal of Industrial Organization
- 出版年：2001
- 期刊代码：22_01677187
- 类别：eco
- 出版时间：May, 2001
- 卷：19
- 期：6
- 页码：885-908
- 文件大小：113 K
摘要
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 incidence 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.