Commodity taxation as insurance against price risk
The paper shows how commodity taxes can provide insurance to consumers when the producer price is volatile. Specific and ad valorem taxes have differing roles. The optimal specific tax is positive when demand has some elasticity. The optimal ad valorem rate is zero when demand is unit-elastic, negat...
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| Formáid: | Working paper |
| Foilsithe / Cruthaithe: |
University of Oxford
2002
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| _version_ | 1826269388036112384 |
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| author | Cowan, S Cowan, S |
| author_facet | Cowan, S Cowan, S |
| author_sort | Cowan, S |
| collection | OXFORD |
| description | The paper shows how commodity taxes can provide insurance to consumers when the producer price is volatile. Specific and ad valorem taxes have differing roles. The optimal specific tax is positive when demand has some elasticity. The optimal ad valorem rate is zero when demand is unit-elastic, negative when demand is inelastic and positive for elastic demand. When both types of taxes are used in general the specific tax is positive and the ad valorem rate is negative. The model also applies to the problem in public utility regulation of determining how retail prices should move with wholesale or fuel prices. |
| first_indexed | 2024-03-06T21:24:16Z |
| format | Working paper |
| id | oxford-uuid:428b1168-d12f-45eb-8f0a-f6767245ae1a |
| institution | University of Oxford |
| last_indexed | 2024-03-06T21:24:16Z |
| publishDate | 2002 |
| publisher | University of Oxford |
| record_format | dspace |
| spelling | oxford-uuid:428b1168-d12f-45eb-8f0a-f6767245ae1a2022-03-26T14:50:08ZCommodity taxation as insurance against price riskWorking paperhttp://purl.org/coar/resource_type/c_8042uuid:428b1168-d12f-45eb-8f0a-f6767245ae1aBulk import via SwordSymplectic ElementsUniversity of Oxford2002Cowan, SCowan, SThe paper shows how commodity taxes can provide insurance to consumers when the producer price is volatile. Specific and ad valorem taxes have differing roles. The optimal specific tax is positive when demand has some elasticity. The optimal ad valorem rate is zero when demand is unit-elastic, negative when demand is inelastic and positive for elastic demand. When both types of taxes are used in general the specific tax is positive and the ad valorem rate is negative. The model also applies to the problem in public utility regulation of determining how retail prices should move with wholesale or fuel prices. |
| spellingShingle | Cowan, S Cowan, S Commodity taxation as insurance against price risk |
| title | Commodity taxation as insurance against price risk |
| title_full | Commodity taxation as insurance against price risk |
| title_fullStr | Commodity taxation as insurance against price risk |
| title_full_unstemmed | Commodity taxation as insurance against price risk |
| title_short | Commodity taxation as insurance against price risk |
| title_sort | commodity taxation as insurance against price risk |
| work_keys_str_mv | AT cowans commoditytaxationasinsuranceagainstpricerisk AT cowans commoditytaxationasinsuranceagainstpricerisk |