Consumer demand system estimation and value added tax reforms in the Czech Republic

Arbeitspapier

The rates of value added tax (VAT) have recently changed in the Czech Republic, and I simulate the impact of these reforms. They are an example of changes in indirect taxes that change the prices of goods and services, to which households can respond by adjusting their expenditures. I first estimate the behavioural response of consumers to price changes in the Czech Republic by applying a consumer demand model of the quadratic almost ideal system (QUAIDS) on the basis of the Czech Statistical Office household expenditure and price data for the period from 2001 to 2011. I derive estimates of own- and cross-price and income elasticities for individual households. I then use these elasticities to estimate the impact of the changes in VAT rates that were proposed or implemented between 2011 and 2013, on households' quantity demanded and government revenues. One of the main findings is that the estimated increases in government revenues that take the consumer responses into account are more than a quarter lower than the estimates that use the static simulation.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IES Working Paper ; No. 07/2014

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Consumer Economics: Empirical Analysis ; Taxation, Subsidies, and Revenue: General ; Fiscal Policies and Behavior of Economic Agents: Household
• Thema: consumer behaviour ; demand system ; QUAIDS ; tax reforms ; value added tax

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Janský, Petr
• Ereignis: Veröffentlichung
• (wer): Charles University in Prague, Institute of Economic Studies (IES)
• (wo): Prague
• (wann): 2014

Weitere Informationen

• Handle: http://hdl.handle.net/10419/102586
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ