000 02575cam a22003497 4500
001 w27117
003 NBER
005 20211020103741.0
006 m o d
007 cr cnu||||||||
008 210910s2020 mau fo 000 0 eng d
100 1 _aGehrsitz, Markus.
245 1 4 _aThe Effect of Changes in Alcohol Tax Differentials on Alcohol Consumption /
_cMarkus Gehrsitz, Henry Saffer, Michael Grossman.
260 _aCambridge, Mass.
_bNational Bureau of Economic Research
_c2020.
300 _a1 online resource:
_billustrations (black and white);
490 1 _aNBER working paper series
_vno. w27117
500 _aMay 2020.
520 3 _aWe show that tax-induced increases in alcohol prices can lead to substantial substitution and avoidance behavior that limits reductions in alcohol consumption. Causal estimates are derived from a natural experiment in Illinois where spirits and wine taxes were raised sharply and unexpectedly in 2009. Beer taxes were increased by only a trivial amount. We construct representative and consistent measures of alcohol prices and sales from scanner data collected for hundreds of products in several thousand stores across the US. Using several differences-in-differences models, we show that alcohol excise taxes are instantly over-shifted by a factor of up to 1.5. Consumers react by switching to less expensive products and increase purchases of low-tax alcoholic beverages, thus all but offsetting any moderate, tax-induced reductions in total ethanol consumption. Our study highlights the importance of tax-induced substitution, the implications of differential tax increases by beverage group and the impacts on public health of alternative types of tax hikes whose main aims are to increase revenue.
530 _aHardcopy version available to institutional subscribers
538 _aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538 _aMode of access: World Wide Web.
588 0 _aPrint version record
690 7 _aI12 - Health Behavior
_2Journal of Economic Literature class.
690 7 _aI18 - Government Policy • Regulation • Public Health
_2Journal of Economic Literature class.
700 1 _aSaffer, Henry.
_919993
700 1 _aGrossman, Michael.
_911927
710 2 _aNational Bureau of Economic Research.
830 0 _aWorking Paper Series (National Bureau of Economic Research)
_vno. w27117.
856 4 0 _uhttps://www.nber.org/papers/w27117
856 _yAcceso en lĂ­nea al DOI
_uhttp://dx.doi.org/10.3386/w27117
942 _2ddc
_cW-PAPER
999 _c321006
_d279568