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Do Taxes Produce Better Wine?
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Martin Ljunge
Published/Copyright:
December 16, 2011
Theory predicts that unit taxes increase the quality consumed in a market, since unit taxes reduce the relative price of high quality goods. Ad valorem taxes, on the other hand, have no effect on relative prices, and should not affect product quality. The hypothesis is tested empirically in the US wine market. I find that the market share of high quality wine is significantly increased by unit taxes, and that there is no significant effect of ad valorem taxes, in accordance with the hypothesis and previous empirical studies.
Published Online: 2011-12-16
©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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- Tax Incidence When Quality Matters: Evidence from the Beer Market
- Market Efficiency in the Non-Genetically Modified Soybean Futures Market
- Do Taxes Produce Better Wine?
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- Does the Prevalence of Contract Hog Production Influence the Price Received by Independent Hog Producers?
- Impact of Country-of-Origin Labeling on Bovine Meat Trade
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- Willingness to Pay for Fair Trade Coffee: A Conjoint Analysis Experiment with Italian Consumers
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- Price Transmission and Volatility in the Greek Broiler Sector: A Threshold Cointegration Analysis
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