Frontiers | Fiscal Reform in Costa Rica: Price Elasticities of Major Food Categories to Inform Decision-Making
In the context of fiscal reform in Costa Rica (value added tax revision), the definition of a new basic tax basket, “canasta básica tributaria” (CBT) in Spanish, incorporating nutritional criteria is underway in the country. In this study, price elasticities of major food categories were analyzed using a Quadratic Almost Ideal Demand System (QUAIDS) model. Data from the 2018 National Survey of Household Income and Expenditures was used (INEC, 2018). Measuring price elasticities is essential because it allows: knowing the extent to which food demand reacts to price changes, anticipating c...
Source: frontiersin.org