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The Welfare Effect on Different Income Groups of Indirect Tax Changes and Inflation in New Zealand

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  • JOHN CREEDY

Abstract

This paper has two main aims, both associated with measuring the welfare effects of price changes. First, it examines the distributional effects of the change in the indirect tax system in New Zealand during the mid‐1980s. Second, it examines the distributional impact of recent inflation in New Zealand. The results confirm those of previous studies which found that indirect taxes in New Zealand did not have a substantially larger impact on low income groups compared with high income groups. Furthermore, the introduction of the goods and services tax does not appear to be regressive. However, recent price changes in New Zealand have had a higher impact on the high income groups, although this tendency is quite small.

Suggested Citation

  • John Creedy, 1998. "The Welfare Effect on Different Income Groups of Indirect Tax Changes and Inflation in New Zealand," The Economic Record, The Economic Society of Australia, vol. 74(227), pages 373-383, December.
    • Handle: RePEc:bla:ecorec:v:74:y:1998:i:227:p:373-383
    DOI: 10.1111/j.1475-4932.1998.tb01932.x
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    References listed on IDEAS

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    1. Hopkins, Sandra & Cumming, Jacqueline, 2001. "The impact of changes in private health expenditure on New Zealand households," Health Policy, Elsevier, vol. 58(3), pages 215-229, December.
    2. Jason Loughrey & Cathal O’Donoghue, 2012. "The Welfare Impact of Price Changes on Household Welfare and Inequality 1999-2011," The Economic and Social Review, Economic and Social Studies, vol. 43(1), pages 31-66.

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