Are vat reforms an effective tool for promoting the consumption of culture? Evidence from a quasiexperiment in Spain

Miguel Gómez-Antonio, Ignacio del Moral Arce and Miriam Hortas-Rico
Authors registered in the RePEc Author Service: Miguel Gómez-Antonio

No 2203, Working Papers. Collection A: Public economics, governance and decentralization from Universidade de Vigo, GEN - Governance and Economics research Network

Abstract: Sponsoring culture is a long-term profit-generating investment that public policy makers can achieve by means of Pigouvian subsidy or tax schemes. This paper evaluates the effectiveness of the three VAT reforms implemented between 2012 and 2018 (one tax raise reform and two tax cut reforms) in the cultural sector in Spain. We first provide visual evidence and empirical estimates of the tax shifting and the distribution of the VAT burden between consumers and producers. We then use a regression discontinuity design to assess the causal effects of these VAT reforms on performing acts and cinema consumption (both in the extensive and the intensive margin).

Keywords: fiscal policy tools; VAT reform; cultural goods; quasi-experimental methods. (search for similar items in EconPapers)
JEL-codes: C22 C34 C35 H27 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2022-05
New Economics Papers: this item is included in nep-cul and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:gov:wpaper:2203

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