Aviation taxation and tax incidence

Shih-Hsien Chuang

Applied Economics, 2021, vol. 53, issue 4, 454-468

Abstract: This paper investigates tax incidence resulting from the ‘combined unit tax’ levied on domestic air travel. Using a panel dataset and estimating with first-differences, I find that domestic aviation taxes are over-shifted to passengers by 30–70 cents per dollar tax. A potential nonlinear relationship between tax and fare changes is detected. The results are essential to future studies on tax salience. Seasonal effects are the most pronounced in periods with high demand. I extend the literature by providing fresh evidence of tax incidence in the airline industry and complementing the over-shifting results found in other industries.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2020.1808179 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:taf:applec:v:53:y:2021:i:4:p:454-468

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2020.1808179

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().