This article generalizes existing results on the effects of specific and ad valorem
taxes on product quality in competitive markets. It is shown that the critical quantity
on which these effects turn is the price elasticity of the marginal valuation of quality.
Previous analyses, it emerges, have implicitly focused on the special cases in which
this elasticity is zero or unity. It is also shown that there are circumstances in which
this elasticity is exactly the reciprocal of the elasticity of substitution between price
and quality in the indirect utility function.
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