Adjustment of excise duty on consumption of residents in China based on welfare dominance.

Consumption tax reform should aim to improve social welfare. In this paper, an extending of welfare dominance method is given from individual data to group data, the concentration curve of group data is used to express the concept of welfare dominance in commodity under the condition of income marginal utility positive and decreasing. Inequality disgust parameter is introduced into income elasticity, which is one of most important property described welfare dominance, and a method for group data is provided to calculate accurately sample extended income elasticity. An application example is provided to explain welfare dominance approach using Chinese provincial data of eight types expenditure of consumption of urban and rural residents in 2013; research results indicate that will improve social welfare and provide the direction of tax adjusting in commodity spent by Chinese urban and rural residents, to subsidize urban residents consumption expenditure of food, clothing, residence, household facilities and articles, health care and medical services, or to subsidize rural residents household facilities and articles. [ABSTRACT FROM AUTHOR]