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The Comparison between Ad Valorem and Unit Taxes under Monopolistic Competition

Discussion Papers 333, 10 S.

Philipp J. H. Schröder

2003. Mrz.

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This paper shows that the welfare dominance of ad valorem over unit taxes under imperfect competition, extends to the Dixit-Stiglitz framework with differentiated products, entry and love of variety. This contrasts against findings by Anderson et al. (J Public Econ, 2001) made in a similar framework, but under Bertrand competition.

JEL-Classification: D43;H21;H22;L13
Keywords: Unit tax; Specific tax; Ad valorem tax; Welfare
Frei zugängliche Version: (econstor)