Abstract EN:

The simulation methodology described by King (1983 a,b) is used to evaluate the welfare effects of six vat reforms. Starting from the 10645 households of the INSEE survey budgets des familles 1979, we obtain a sample of 1045 grouped households, and estimate a linear expenditure system with 23 goods categories. The results are very close to those obtained in previous studies (Baccouche (1984), Baccouche and Laisney (1986)), in spite of large differences in the methodology (estimation on individual or grouped cross section data or even on aggregate time series data) and both in the nature of goods considered (inclusion or exclusion of durables) and in the level of aggregation (4, 11 and 23 goods). A result common to all reforms is that the effects on inequality measures remain small, even for quite dramatic reforms, which points to the limits of the redistributive effects of vat reforms. The analysis provides approximations for the standard errors of the welfare measures we calculate. Taking account of these proves important as the significance of results varies substantially with the definition of reforms.