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Impact of Changes in Excise Duties on Households in the Czech Republic

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  • Petr Janský

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic)

Abstract

Excise duties are an important source of government revenue and their rates change relatively often in the Czech Republic. Reforms of excise duties change the prices of goods, a change to which households respond by adjusting their expenditures. I use detailed Czech Statistical Office data and estimates of own- and cross-price and income elasticities for individual households to create a microeconomic simulation model that enables me to simulate the impact of changes in excise duties on households’ demands. I show the distributional impact of current excise duties and then I simulate the impact of hypothetical increases of 10 per cent in each of them. I further simulate impact of certain approved or proposed changes in excise duties including the unsuccessful 2012 proposal to introduce an excise duty on wine.

Suggested Citation

  • Petr Janský, 2014. "Impact of Changes in Excise Duties on Households in the Czech Republic," Working Papers IES 2014/25, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Aug 2014.
    • Handle: RePEc:fau:wpaper:wp2014_25
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    File URL: http://ies.fsv.cuni.cz/sci/publication/show/id/5194/lang/cs
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    References listed on IDEAS

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    More about this item

    Keywords

    consumer behaviour; excise duties; tax reforms; households;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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