Arbeitspapier
Soda tax incidence and design under monopoly
We consider an unhealthy good, such as a sugar-sweetened beverage, the health damages of which are misperceived by consumers. The sugar content is endogenous. We first study the solution under “pseudo” perfect competition. In that case a simple Pigouvian tax levied per unit of output but proportional to the sugar content is sufficient to achieve a first best solution. Then we consider a monopoly. Market power affects both output and sugar content, possibly in opposite directions, and these effects have to be balanced against Pigouvian considerations. We show that, nevertheless, a tax per unit of output achieves an efficient solution, but it must be an affine function of the sugar content; taxing “grams of sugar” is no longer sufficient. Interestingly, both the total tax as well as its sugar component can be positive as well as negative.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 7525
- Klassifikation
-
Wirtschaft
Taxation and Subsidies: Incidence
Health Behavior
Market Structure, Pricing, and Design: Monopoly
- Thema
-
sin tax
tax incidence
misperception
monopoly
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Cremer, Helmuth
Goulão, Catarina
Lozachmeur, Jean-Marie
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2019
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Cremer, Helmuth
- Goulão, Catarina
- Lozachmeur, Jean-Marie
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2019
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