TY - JOUR
T1 - Market equilibrium and the environmental effects of tax adjustments in China's automobile industry
AU - XIAO, Junji
AU - JU, Heng
PY - 2014/5
Y1 - 2014/5
N2 - This paper explores the effects of consumption-tax and fuel-tax adjustments in the Chinese automobile industry. Applying the model and simulation method of Berry, Levinson, and Pakes (1995), we conduct a comparative static analysis of equilibrium prices and sales, fuel consumption,and social welfare before and after tax adjustments. For the first time, we compare the progressivity of both taxes. Our empirical findings suggest that the fuel tax is effective in decreasing fuel consumption at the expense of social welfare, while the consumption tax does not significantly affect either fuel consumptionor social welfare.
AB - This paper explores the effects of consumption-tax and fuel-tax adjustments in the Chinese automobile industry. Applying the model and simulation method of Berry, Levinson, and Pakes (1995), we conduct a comparative static analysis of equilibrium prices and sales, fuel consumption,and social welfare before and after tax adjustments. For the first time, we compare the progressivity of both taxes. Our empirical findings suggest that the fuel tax is effective in decreasing fuel consumption at the expense of social welfare, while the consumption tax does not significantly affect either fuel consumptionor social welfare.
UR - http://www.scopus.com/inward/record.url?scp=84900789489&partnerID=8YFLogxK
U2 - 10.1162/REST_a_00444
DO - 10.1162/REST_a_00444
M3 - Journal Article (refereed)
AN - SCOPUS:84900789489
SN - 0034-6535
VL - 96
SP - 306
EP - 317
JO - Review of Economics and Statistics
JF - Review of Economics and Statistics
IS - 2
ER -