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Optimal alcohol taxation: Simulation results for Estonia

Author

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  • Indrek Saar

    (Estonian Academy of Security Sciences)

Abstract

The aim of this paper is to empirically estimate the optimal level of alcohol taxes for Estonia on externality as well as fiscal grounds. For this purpose, a static general-equilibrium model with a representative agent was used. Simulation results showed that raising alcohol taxes a certain amount is warranted. However, if one were to use conservative parameter values, this result is undermined. With an eye towards future research, more reliable estimates for several parameters are required in order to increase the policy relevance of the model.

Suggested Citation

  • Indrek Saar, 2011. "Optimal alcohol taxation: Simulation results for Estonia," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 11(1), pages 65-90, July.
    • Handle: RePEc:bic:journl:v:11:y:2011:i:1:p:65-90
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    File URL: https://www.tandfonline.com/doi/epdf/10.1080/1406099X.2011.10840491
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    References listed on IDEAS

    as
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    Cited by:

    1. Karel Janda & Zuzana Lajksnerová & Jakub Mikolášek, 2019. "A General Equilibrium Model of Optimal Alcohol Taxation in the Czech Republic," Prague Economic Papers, Prague University of Economics and Business, vol. 2019(5), pages 589-611.
    2. repec:prg:jnlpep:v:preprint:id:706:p:1-23 is not listed on IDEAS

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    More about this item

    Keywords

    alcohol; externalities; optimal tax;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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