Engel curves on outsourcing and foreign environmental taxes: A valued-added approach
Corresponding Author
Peri Silva
Department of Economics, Kansas State University, Manhattan, Kansas, USA
Correspondence
Peri Silva, Department of Economics, Kansas State University, Manhattan, 66506 KS, USA.
Email: [email protected]
Search for more papers by this authorCorresponding Author
Peri Silva
Department of Economics, Kansas State University, Manhattan, Kansas, USA
Correspondence
Peri Silva, Department of Economics, Kansas State University, Manhattan, 66506 KS, USA.
Email: [email protected]
Search for more papers by this authorAbstract
This paper estimates Engel curves on the foreign content (outsourcing) and the foreign environmental taxes embedded in the consumption of final goods and services in the United States (U.S.). We estimate Engel curves using U.S. household income and consumption information from 1996 to 2011 and find that they are concave and shift down over time. Importantly, our results suggest a coherent picture where the foreign content and the foreign environmental taxes in U.S. household consumption bundles decreased on average over time primarily because of a composition effect where the significant income increase has led to a shift in consumption towards goods and services with lower foreign content and lower foreign environmental taxes. Both effects represent a movement along their respective Engel curves. Consequently, other effects besides income changes play a minor role in the evolution of consumer decisions and their relationship with foreign content and environmental taxes.
CONFLICT OF INTEREST STATEMENT
The authors certify that they have NO affiliations with or involvement in any organization or entity with any financial interest (such as honoraria; educational grants; participation in speakers' bureaus; membership, employment, consultancies, stock ownership, or other equity interest; and expert testimony or patent-licensing arrangements), or non-financial interest (such as personal or professional relationships, affiliations, knowledge or beliefs) in the subject matter or materials discussed in this manuscript.
Open Research
DATA AVAILABILITY STATEMENT
The data that support the findings of this study are available from the corresponding author upon reasonable request.
Supporting Information
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