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Fiscal and economic aspects of book consumption in the European Union

Author

Listed:
  • Karol Jan Borowiecki

    (University of Southern Denmark)

  • Trilce Navarrete

    (Erasmus University Rotterdam)

Abstract

One of the available and yet controversial tools in cultural policy at the national level is the reduction of VAT rates for cultural goods and services. We document the standard and reduced VAT rates in EU-28 countries in the period from 1993 to 2013 and explore the underlying determinants. We further introduce a simple theoretical framework to explain how reduced fiscal rates are expected to decrease prices and increase quantities of the consumed cultural goods and services. We then estimate quantitatively that a decrease in the VAT rate for books by one percentage point is associated with an economically significant drop in the price by 2.6%. Finally, we show the positive effect of a fiscal rate reduction on the book expenditure, where a one percentage point decrease in the VAT rate for books leads to an increase in expenditure by 2.7%.

Suggested Citation

  • Karol Jan Borowiecki & Trilce Navarrete, 2018. "Fiscal and economic aspects of book consumption in the European Union," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 42(2), pages 309-339, May.
    • Handle: RePEc:kap:jculte:v:42:y:2018:i:2:d:10.1007_s10824-017-9307-z
    DOI: 10.1007/s10824-017-9307-z
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    Cited by:

    1. Ursprung, Heinrich W., 2021. "Financial returns to collecting rare political economy books," European Journal of Political Economy, Elsevier, vol. 70(C).
    2. Marvao, Catarina & Borowiecki, Karol, 2015. "Dance Participation and Attendance in Denmark," SITE Working Paper Series 33, Stockholm School of Economics, Stockholm Institute of Transition Economics.
    3. Ellen Loots & Diana Betzler & Trine Bille & Karol Jan Borowiecki & Boram Lee, 2022. "New forms of finance and funding in the cultural and creative industries. Introduction to the special issue," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 46(2), pages 205-230, June.
    4. Gómez-Antonio, Miguel & del Moral Arce, Ignacio & Hortas-Rico, Miriam, 2022. "Are VAT reforms an effective tool for promoting culture? A quasi-experiment in Spain," Journal of Policy Modeling, Elsevier, vol. 44(5), pages 1016-1040.
    5. Karol J. Borowiecki & Trilce Navarrete, 2017. "Digitization of heritage collections as indicator of innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(3), pages 227-246, April.
    6. Katarzyna Kopeć, 2020. "Reduced Value Added Tax (VAT) Rate on Books as a Tool of Indirect Public Funding in the Cultural Sector," Sustainability, MDPI, vol. 12(14), pages 1-14, July.
    7. Janina Kotlinska & Marian Zukowski & Pawel Marzec & Jaroslaw Kuspit & Zdzislaw A. Blasiak, 2020. "Household Consumption and VAT Revenue in Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 580-605.
    8. Paul Crosby, 2019. "Don’t judge a book by its cover: examining digital disruption in the book industry using a stated preference approach," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 43(4), pages 607-637, December.
    9. Trilce Navarrete & Karol J. Borowiecki, 2015. "Change in access after digitization: Ethnographic collections in Wikipedia," ACEI Working Paper Series AWP-10-2015, Association for Cultural Economics International, revised Oct 2015.
    10. Victoria Ateca-Amestoy & Javier Gardeazabal & Arantza Ugidos, 2020. "On the response of household expenditure on cinema and performing arts to changes in indirect taxation: a natural experiment in Spain," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 44(2), pages 213-253, June.
    11. Javier García-Enríquez & Cruz A. Echevarría, 2018. "Demand for culture in Spain and the 2012 VAT rise," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 42(3), pages 469-506, August.
    12. Miguel Gómez-Antonio & Ignacio del Moral Arce & Miriam Hortas-Rico, 2022. "Are vat reforms an effective tool for promoting the consumption of culture? Evidence from a quasiexperiment in Spain," Working Papers. Collection A: Public economics, governance and decentralization 2203, Universidade de Vigo, GEN - Governance and Economics research Network.
    13. Samuel Cameron, 2019. "Cultural economics, books and reading," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 43(4), pages 517-526, December.
    14. Ravil Akhmadeev & Tatiana Morozova & Olga Yurievna Voronkova & Alexey A. Sitnov, 2019. "Targets determination model for VAT risks mitigation at B2B marketplaces," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 7(2), pages 1197-1216, December.

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    More about this item

    Keywords

    Cultural consumption; Book markets; Cultural policy; Value added tax; Fiscal policy;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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