VAT Pass-Through: The Case of a Large and Permanent Reduction in the Market for Menstrual Hygiene Products

Alisa Frey and Justus Haucap

No 9962, CESifo Working Paper Series from CESifo

Abstract: This paper is about the price effects caused by a VAT (value-added tax) reduction for menstrual hygiene products in Germany. Several aspects make this VAT reduction particularly interesting: The exogeneity of the reduction under otherwise constant economic conditions, the reduction was substantial and permanent, demand for the products is inelastic and in many cases, pass-through rates are more than 100 percent. We find that the VAT reduction is completely passed through to consumers. Despite this complete pass-through, we still detect a significant effect of retailer competition: When more retailers offer a product, the price reduction is larger.

Keywords: VAT reduction; pass-through; hygiene products; retailer competition (search for similar items in EconPapers)
JEL-codes: H22 H25 H32 K34 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-com, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp9962.pdf (application/pdf)

Related works:
Journal Article: VAT pass-through: the case of a large and permanent reduction in the market for menstrual hygiene products (2024)
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:ces:ceswps:_9962

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().