Pass-Through of Subsidies to Prices under Limited Competition¶
Galloway, T., & Li, N. (2023). Pass-Through of Subsidies to Prices under Limited Competition: Evidence from Canada's Nutrition North Program. Journal of Public Economics, 225.
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1 citation across 1 artifact.
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Primes¶
- Withdrawal Rebound
- In regulation and subsidy it is the price jump when a capitalized subsidy is ended, because supply chains and inventories had re-equilibrated around its presence — large in the estimates, though not established as bigger than the subsidy was worth, since measured pass-through to retail prices runs well below one-for-one.
This sourcePOINTS AGAINST the overshoot this passage previously asserted: "retail prices were lowered by 67 cents for every additional dollar of subsidy, well below the full pass-through," which under symmetry implies a post-removal rise smaller than the subsidy's value rather than larger. Over-shifting is documented for taxes, not for subsidy withdrawal.
- In regulation and subsidy it is the price jump when a capitalized subsidy is ended, because supply chains and inventories had re-equilibrated around its presence — large in the estimates, though not established as bigger than the subsidy was worth, since measured pass-through to retail prices runs well below one-for-one.
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