The Effect of the Value-Added Tax on the Quantity Demanded of Commodity in the Ordinal Marginal Utility Theory

• Main Author: 陳佑貞
• Other Authors: Lin, Chung-Cheng
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/yx2jwv

碩士 === 國立政治大學 === 財政學系 === 106 === This paper used the method of ordinal marginal utility theory brought up by Chung-Cheng Lin et al. to explore the impact of value-added tax (VAT) on the quantity demanded of commodity. Also, it compared with the theory of maximizing total utility to see difference. Comparing the two theories, the space for the above-mentioned issues will be explained. There are great differences, and it can be concluded that the ordinal marginal utility theory method can more accurately and reasonably explain the economic phenomenon than the maximizing total utility theory method. 　　Under the framework of maximizing total utility theory, modern economic theory adopts two main consumer utility theories, the ordinal utility theory and the cardinal utility theory. (hereafter referred to as the old theory)However, there are critical limitations in the two theories separately. For example, the former can't maintain the second derivative term after the positive monotonous transformation. The latter can only perform the positive linear transformation, and the added assumption is almost impossible to be established in real life.That is, Chung-Cheng Lin and his co-workers bring up a new utility theory which can combine the advantages of the old theories without their disadvantages, called the ordinal marginal utility theory. (hereafter referred to as the new theory) 　　The study of the effect of additional value added tax on the demand for consumer goods is a basic and important economic issue. It is based on this article's attempt to use new theories, and it is the first time in the research that uses the new theory to analyze the value added tax. The results of the study found a total of 19 possible causes will result in an increase in the tax rate and the demand for commodities. After that, this paper adopts the new theory (the ordinal marginal utility theory) as a framework for analysis, and found that there are a total of 119,190(or118,262) rough statistics which may cause the increase in tax rate to reduce (or increase) the demand for commodities. Although this figure will be different from the actual situation or the result of an accurate estimation, it still showed that in the world of new theories, the space in which economic phenomena can be explained by economic thinking will be greatly exploited. Next, this paper considers only one of the numerators and denominators, that is, under the simple collocation of the two forces, when the tax rate increases, a total of 25 (or 24) simple combinations will cause the demand of goods to decline (or rise). 　　In the end, this paper selects four combinations from the simple combination of the two forces mentioned above and sets specific models to examine them under the framework of the old and new theories separately. After the comparison, it can display that the new theory can indeed find more economic implications that have been lost or cannot be explored in old theories. From this perspective, ordinal marginal utility analysis is indeed better than maximizing total utility analysis.