A General Equilibrium Model of Optimal Alcohol Taxation in the Czech Republic

Karel Janda, Zuzana Lajksnerová and Jakub Mikolášek

Prague Economic Papers, 2019, vol. 2019, issue 5, 589-611

Abstract: This paper provides a general equilibrium theoretical model of alcohol taxation and empirically estimates the model. For this purpose, we use a model determined by both externality corrections and fiscal considerations as the tax increase is assumed to immediately change other governmental policies such as labour taxation or medical expenditures. The results of our analysis show that under most parametric scenarios, the current Czech tax rate on beer and wine is below its optimal level and that the fiscal component has a significant impact on the optimal level of tax.

Keywords: alcohol; beer; wine; Czech Republic; elasticity; price; social costs; tax (search for similar items in EconPapers)
JEL-codes: H21 Q02 Q18 (search for similar items in EconPapers)
Date: 2019
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Working Paper: A General Equilibrium Model of Optimal Alcohol Taxation in the Czech Republic (2018)
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DOI: 10.18267/j.pep.706

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