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Time Use, Computable General Equilibrium and Tax Policy Analysis

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  • Ferri, Javier
  • Moltó, María Luisa
  • Uriel, Ezequiel

Abstract

The motivation behind this paper is to provide some guidance on how to apply a general equilibrium model with home production in a real world setting to analyze economy-wide tax policies. The story line is the model of Iorweth and Whalley (2002), which we write as a mixed complementarity problem to make it ready to easily accommodate more consumers, commodities and household production functions. The model evaluates the welfare impact of introducing VAT on food in a context in which households can produce home meals for own consumption that compete with meals served in restaurants. With this model at hand we proceed as follows: first, we replicate some of the IW results and confirm that they depend on the elasticity of substitution between food and time in the household production of meals. Secondly, we move to the Spanish data and simulate the effects on welfare of different fiscal experiments. Finally, we enlarge the number of consumers and tackle some distributional issues.

Suggested Citation

  • Ferri, Javier & Moltó, María Luisa & Uriel, Ezequiel, 2005. "Time Use, Computable General Equilibrium and Tax Policy Analysis," Conference papers 331322, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331322
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    File URL: https://ageconsearch.umn.edu/record/331322/files/1918.pdf
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    References listed on IDEAS

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    1. Lluch, Constantino, 1973. "The extended linear expenditure system," European Economic Review, Elsevier, vol. 4(1), pages 21-32, April.
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    3. Nguyen Chan & Madanmohan Ghosh & John Whalley, 1999. "Evaluating Tax Reform in Vietnam Using General Equilibrium Methods," University of Western Ontario, Departmental Research Report Series 9904, University of Western Ontario, Department of Economics.
    4. Ivanic, Maros, 2004. "Reconciliation of the GTAP and Household Survey Data," GTAP Research Memoranda 1408, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    5. Maureen T. Rimmer & Alan A. Powell, 1992. "An Implicitly Directly Additive Demand System: Estimates for Australia," Centre of Policy Studies/IMPACT Centre Working Papers op-73, Victoria University, Centre of Policy Studies/IMPACT Centre.
    6. Thomas W. Hertel & Maros Ivanic & Paul V. Preckel & John A. L. Cranfield, 2004. "The Earnings Effects of Multilateral Trade Liberalization: Implications for Poverty," The World Bank Economic Review, World Bank, vol. 18(2), pages 205-236.
    7. Howe, Howard, 1975. "Development of the extended linear expenditure system from simple saving assumptions," European Economic Review, Elsevier, vol. 6(3), pages 305-310, July.
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    Cited by:

    1. Cicowiez, Martin, 2018. "Time Use and the Care Economy in Latin America: A General Equilibrium Analysis," Conference papers 332950, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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