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Effects of Alcohol Taxation on Prices: A Systematic Review and Meta-Analysis of Pass-Through Rates

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  • Nelson Jon P.

    (Pennsylvania State University, Department of Economics, 642 Glenn RdState College, PA 16803, United States of America)

  • Moran John R.

    (Pennsylvania State University, Department of Health Policy and Administration, University Park, PA 16802, United States of America)

Abstract

This paper conducts the first review and meta-analysis for estimates of alcohol excise tax pass-through rates. A total of 30 empirical studies are examined. Several widely cited studies indicate substantial overshifting, suggesting imperfectly-competitive markets for alcohol. The narrative review provides insights for data coverage by country; econometric models; and results for under- or overshifting by beverage. Weighted-averages calculated for two samples show that beer taxes are overshifted and wine-spirits taxes are fully shifted. Meta-regressions corrected for publication bias indicate, however, that full-shifting cannot be rejected for any beverage. Results are useful for alcohol tax policy and future research on optimal taxation and incidence.

Suggested Citation

  • Nelson Jon P. & Moran John R., 2020. "Effects of Alcohol Taxation on Prices: A Systematic Review and Meta-Analysis of Pass-Through Rates," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(1), pages 1-21, January.
    • Handle: RePEc:bpj:bejeap:v:20:y:2020:i:1:p:21:n:11
    DOI: 10.1515/bejeap-2019-0134
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    Cited by:

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    2. Michelle Sovinsky & Liana Jacobi & Alessandra Allocca & Tao Sun, 2024. "More than Joints: Multi-Substance Use, Choice Limitations, and Policy Implications," CRC TR 224 Discussion Paper Series crctr224_2024_501, University of Bonn and University of Mannheim, Germany.
    3. Ce Shang & Anh Ngo & Frank J. Chaloupka, 2020. "The pass-through of alcohol excise taxes to prices in OECD countries," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(6), pages 855-867, August.

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    More about this item

    Keywords

    tax incidence; excise taxes; optimal taxation; alcohol beverages; meta-analysis;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • C19 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Other

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