Date and Time

Friday, November 22nd, 2024
5:00 p.m.-6:30 p.m.

Presenter

Dr. Vinay Ramani (Indian Institute of Technology Kanpur)

Title

Luxury Goods Taxation and Social Welfare in a Vertically Differentiated Market with Snob Effec

Abstract

We investigate the welfare implications of luxury goods taxation and non-luxury goods subsidies in a vertically differentiated product market. We integrate the concept of snob effects into consumer preferences for luxury goods. As one consumer possess luxury goods, the intensity of his snob increases with the proportion of consumers without the luxury goods, manifesting as specific negative network effects. We find that in the absence of government intervention, an increase in the degree of network externalities enhances consumer surplus and social welfare, conversely, enhancements in luxury goods quality decrease both. When the luxury goods tax is levied, it yields a welfare-distribution effect by curbing the welfare of relatively price-insensitive consumers and amplifying the welfare of relatively price-sensitive consumers. The simultaneous enactment of luxury goods tax and non-luxury goods subsidy leads to the greatest profits for non-luxury goods firms and the most significant enhancement in welfare of non-luxury goods consumers, thereby yielding the highest social welfare. Thus, our work provides a new driving force and insight for the analysis of the snob effect of luxury goods and its policy-making implication.

Venue

Mid Conference Room (GSBA), Rokko-dai 1st Campus, Building Ⅲ 1F

Language

English

Organized by

Intended Participants

Professors, Graduate students including KIMAP students and Alumni of Kobe University.

How to register for this seminar

Please apply from the URL below by Thursday, November 21st .
https://docs.google.com/forms/d/1fTdQcTcA4QP7FnpnVB4FYBkMr77dIMQ2LWxawHIFOFY/edit

Remarks

Please apply by Monday, 18th November if you would like to interact with Dr. Vinay Ramani before or after the seminar.