Specific or ad valorem? A theory of casino taxation
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Kahlil Philander [1]
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[1] University of Nevada, Las Vegas
University of Nevada, Las Vegas
Estados Unidos
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- Localización: Tourism economics: the business and finance of tourism and recreation, ISSN 1354-8166, Vol. 20, Nº. 1, 2014, págs. 107-122
- Idioma: inglés
- Texto completo no disponible (Saber más ...)
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Resumen
This paper explores the effects of excise taxation in markets containing two consumer groups with distinct differences in demand elasticity. A model of second degree price discrimination is employed with an endogenously funded public good to represent a protected casino market with two distinct consumer groups, problem gamblers and recreational gamblers. The paper finds that, when quantity is used as the endogenous product variable, consumers tend to obtain a higher provision of the public good with specific taxes than with ad valorem taxes. The model also provides evidence that the casino gambling industry may not be a good candidate for a Pigovian tax due to the behaviour of a small group that produces negative externalities (problem gamblers) but that also tends to be more price-insensitive than the rest of the population.
