Marginal tax reform and the specification of consumer demand systems

David (David Patrick) Madden

No 199303, Working Papers from School of Economics, University College Dublin

Abstract: This paper examines the conjecture that tax reform recommendations are not as sensitive to underlying consumer demand systems as are derived optimal tax rates. Tax reform recommendations for Ireland using the Ahmad-Stern model of indirect tax reform with different underlying consumer demand systems are examined. They are found to exhibit little sensitivity to the underlying deterministic demand system, but they do display considerable sensitivity to dynamic specification. They also display sensitivity with regard to the imposition of the restrictions implied by utility maximisation, especially symmetry.

Keywords: Taxation--Ireland; Consumption (Economics)--Ireland; Taxation--Econometric models (search for similar items in EconPapers)
Date: 1993-01
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http://hdl.handle.net/10197/1707 First version, 1993 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:199303

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