Cheaper and More Haircuts After VAT Cut? Evidence From the Netherlands

Egbert Jongen, Arjan Lejour and Gabriella Massenz

No 368, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: We study the effect of the reduction in the VAT rate on services by hairdressers from 17.5 to 6 percent in the Netherlands in January 2000. Following Kosonen [2015], we use differences-in-differences to estimate the effects of this reform, with beauty salons as the main control group. In our preferred specification, we find close to full pass-through of the VAT cut into lower prices. However, we find no statistically or economically significant effect on the volume of sales or employment.

JEL-codes: C33 H22 H25 (search for similar items in EconPapers)
Date: 2017-11
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Cheaper and More Haircuts After VAT Cut? Evidence from the Netherlands (2018)
Working Paper: Cheaper and more haircuts after VAT cut?: Evidence from the Netherlands (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:368

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