𝗪𝗲𝗯𝗶𝗻𝗮𝗿: "The Heterogeneous Tax Pass-through under Different Vertical Relationship"

• Thursday 24, 2020 @ 13:00. → Joint Webinar!!!
   Moved to Thursday!!!
• Speaker: Miguel Ángel Borrella-Mas (Navarra Center for International Development (NCID), University of Navarra)
• Title: "The Heterogeneous Tax Pass-through under Different Vertical Relationship"
• Invited by: M. Sartarelli  (ICAE-UCM)

The Heterogeneous Tax Pass-through under Different Vertical Relationship  

By Miguel Ángel Borrella-Mas

Abstract: A large body of literature has examined the impact of the horizontal market structure on consumers' tax incidence, but do differences in the vertical market structure have an impact on the tax pass-through as well? To address this question, we first solve the optimal pricing problem for a retailer, which we embed in the classic "successive monopolies" framework. 

Then, we test our theoretical predictions using a confidential dataset on gas stations contracts with a major Spanish refiner, in combination with their retail fuel prices and characteristics. Consistently, we document that the pass-through of a tax onto prices is about 35 percent higher in vertically-integrated gas stations than in independent ones. Finally, our estimates allow us to assess the impact on government revenue of different counterfactual market scenarios.

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