Economics at your fingertips  

Ad-valorem tax incidence and after-tax price adjustments: evidence from Brazilian basic basket food

Ricardo Politi () and Enlinson Mattos ()

Canadian Journal of Economics, 2011, vol. 44, issue 4, 1438-1470

Abstract: Recent empirical work on tax incidence suggests that after-tax price responses are independent of the tax change direction. This paper investigates asymmetric price responses to ad-valorem tax changes in the Brazilian food market for 10 goods in 16 states during the period 1994-2008. Our results suggest that when tax rates increase, tax full shifting occurs for 2 of the 10 goods and tax overshifting occurs for one of the 10 goods; the price response to tax cuts is an undershifting for all goods. Moreover, this last result is similar to our estimation of (average) tax incidence (undershifting). We also investigate the short-term and long-term relationships between prices and VAT rate parameters and find that prices seem to respond to tax shocks within four months.

JEL-codes: H2 H22 (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link) (text/html)
access restricted to subscribers

Related works:
Journal Article: Ad‐valorem tax incidence and after‐tax price adjustments: evidence from Brazilian basic basket food (2011) Downloads
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:

Ordering information: This journal article can be ordered from
https://www.economic ... ionen/membership.php

Access Statistics for this article

Canadian Journal of Economics is currently edited by Katherine Cuff

More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().

Page updated 2021-05-08
Handle: RePEc:cje:issued:v:44:y:2011:i:4:p:1438-1470