TY - JOUR
T1 - Excise Tax Setting in a Dynamic Space-time Framework
AU - Hoffer, Adam J.
AU - Lacombe, Donald J.
N1 - Publisher Copyright:
© 2016, © The Author(s) 2016.
PY - 2017/9/1
Y1 - 2017/9/1
N2 - This study develops a simple model for analyzing excise tax setting in a competitive framework. Specifically, the model predicts that tax rate competition will vary for different goods based on the relative ease of cross-border shopping. To test the model, this study utilizes a dynamic space-time panel econometric model to quantify the horizontal response function for cigarette, beer, and gasoline tax rates for US states from 1960 to 2007. The empirical findings support the model predictions. Only cigarette tax rates have a horizontal response function statistically different from zero.
AB - This study develops a simple model for analyzing excise tax setting in a competitive framework. Specifically, the model predicts that tax rate competition will vary for different goods based on the relative ease of cross-border shopping. To test the model, this study utilizes a dynamic space-time panel econometric model to quantify the horizontal response function for cigarette, beer, and gasoline tax rates for US states from 1960 to 2007. The empirical findings support the model predictions. Only cigarette tax rates have a horizontal response function statistically different from zero.
KW - dynamic space-time model
KW - horizontal tax competition
KW - spatial econometrics
UR - http://www.scopus.com/inward/record.url?scp=85027397485&partnerID=8YFLogxK
U2 - 10.1177/1091142116659354
DO - 10.1177/1091142116659354
M3 - Article
AN - SCOPUS:85027397485
SN - 1091-1421
VL - 45
SP - 628
EP - 646
JO - Public Finance Review
JF - Public Finance Review
IS - 5
ER -