Work detail

Sin taxes in the Czech Republic

Author: Bc. Jan Mouček
Year: 2012 - summer
Leaders: doc. Petr Janský Ph.D.
Consultants:
Work type: Bachelors
Language: Czech
Pages: 50
Awards and prizes:
Link:
Abstract: This paper is concerning taxes on so called sin goods. Consumption of these
goods is believed to be wrong, its consumption have its negative effects on either the
consumer or others. Such taxes are called excise taxes. In particular we focus this paper
on tax incidence, the effect of these taxes on price of taxed goods. In economic
literature concerning excise taxes it is usually presumed that the price rises by the same
amount that the tax. If this presumption was false, it might have significant effect on
this literature. We have tried to empirically analyse the effect of excise taxes using data
from Czech statistical office and of our own. In particular we focused on cigarettes,
beer, spirits and fuels. Using OLS estimates we came to interesting conclusions
regarding effects of excise taxes on price of taxed products. Our results show almost
zero effect of tax on cigarette and spirit price and at the same time confirm the
presumption of full effect of taxes on beer. Further we modelled effects of value added
tax and lagged effect of taxes with a one year lag. All of our results are definitely
questionable though, as we used very low number of observations and therefore
conclusiveness of these results is very little
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