• Household spending and income inequality: examining the effects o f a c onsumption-based tax in Ghana

    Author(s): Kobena Foh Ocran, and Abel Fumey
    kfohocran@yahoo.com
    2024-07-14 09:43:16

    123 Downloads 169 Views

    Abstract

    This paper examined the impact of VAT on household spending and income inequality in Ghana by incorporating Zivot–Andrews test. The study employed bootstrap autoregressive sive distributed lag model, complemented by Toda–Yamamoto causality test. The empirical findings revealed that the elasticity of consumer spending with respect to VAT is negative, inelastic, and significant in the long-run but leaves no short-run effect. The impact of a change in VAT varies on household spending and income inequality.

    Keywords
    Consumption expenditure; Income inequality; Value-added tax; Kuznets curve; Bootstrap ARDL model; Ghana

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