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Tax incentives can be more or less salient, i.e. noticeable or cognitively easy to process. Our hypothesis is that taxes on consumers are more salient to consumers than equivalent taxes on sellers because consumers underestimate the extent of tax shifting in the market. We show that tax salience...
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cigarettes in Europe. The results are consistent with the theory. There is evidence of under and over-shifting and the specific …
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In theory, the incidence of a tax should be independent of which side of the market it is levied on. This principle of …
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