IMPLICATION OF DEMAND AND SUPPLY THEORY FOR GOVERNMENT POLICY IN UZBEKISTAN

Abstract

This study examines the implications of demand and supply theory for government policy in Uzbekistan, with a focus on tax policy design and its socioeconomic consequences. The research uses theoretical as well as empirical studies from existing literature, exploring the impact of personal income tax, cigarette taxes, and carbon tax. It uses empirical data from household surveys conducted in Uzbekistan, estimating the elasticity of demand for beef, rice, and high-quality flour. The empirical study has reported inelastic, as well as elastic, demand for beef, rice, and high-quality flour, respectively. The paper concludes that elasticity has significant impacts on reaction patterns of people in terms of changes in price or income. Therefore, while framing taxation or price policies, governments must take these elasticity measures seriously.