Oligopoly Deregulation and the Taxation of Commodities

Gilbert Metcalf () and George Norman ()

No 9415, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine the interplay between market structure and the form that commodity taxation should take in a world in which firms produce differentiated products and so are able to exert some degree of market power. Our analysis takes explicit account of two important recent developments that carry significant implications for market structure and so for the appropriate design and effectiveness of commodity taxation: market deregulation and technological change. In the presence of price discrimination, we find that tax policy loses much of its effectiveness at serving as a substitute for direct regulation. Moreover, in cases where taxes can influence market structure, subsides rather than taxes may be required to achieve optimum market structure.

JEL-codes: D43 H20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
Date: 2003-01
Note: PE
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Related works:
Working Paper: Oligopoly Deregulation and the Taxation of Commodities (2002)
Journal Article: Oligopoly Deregulation and the Taxation of Commodities (2003)
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