A Simple Model of Commodity Taxation and Cross‐border Shopping

Søren Nielsen

Scandinavian Journal of Economics, 2001, vol. 103, issue 4, 599-623

Abstract: This paper sets up a simple model in which two countries, differing in geographical extent, engage in commodity tax competition originating in opportunities for cross‐border shopping. The non‐cooperative tax equilibrium and various coordination initiatives are examined in the benchmark model and in two model extensions incorporating (i) costs of transportation for goods and (ii) border inspection. Among the more surprising results are the following: with (i), pure profits accrue to sellers near the border, but subjecting them to tax may lower the country's total tax revenue; with (ii), the volume of cross‐border shopping may well increase. JEL classification: H20; H87; H26

Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (68)

Downloads: (external link)
https://doi.org/10.1111/1467-9442.00262

Related works:
Working Paper: A simple model of commodity taxation and cross-border shopping (1998)
Working Paper: A Simple Model of Commodity Taxation and Cross-Border Shopping
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:scandj:v:103:y:2001:i:4:p:599-623

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0347-0520

Access Statistics for this article

Scandinavian Journal of Economics is currently edited by Richard Friberg, Matti Liski and Kjetil Storesletten

More articles in Scandinavian Journal of Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().