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Are vat reforms an effective tool for promoting the consumption of culture? Evidence from a quasiexperiment in Spain

Author

Listed:
  • Miguel Gómez-Antonio
  • Ignacio del Moral Arce
  • Miriam Hortas-Rico

Abstract

Sponsoring culture is a long-term profit-generating investment that public policy makers can achieve by means of Pigouvian subsidy or tax schemes. This paper evaluates the effectiveness of the three VAT reforms implemented between 2012 and 2018 (one tax raise reform and two tax cut reforms) in the cultural sector in Spain. We first provide visual evidence and empirical estimates of the tax shifting and the distribution of the VAT burden between consumers and producers. We then use a regression discontinuity design to assess the causal effects of these VAT reforms on performing acts and cinema consumption (both in the extensive and the intensive margin).

Suggested Citation

  • 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.
    • Handle: RePEc:gov:wpaper:2203
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    File URL: http://infogen.webs.uvigo.es/WP/WP2203.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    fiscal policy tools; VAT reform; cultural goods; quasi-experimental methods.;
    All these keywords.

    JEL classification:

    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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