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Cross-border shopping of alcoholic beverages: Evidence from a natural experiment

Author

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  • Bjørkås, Eivind
  • Rickertsen, Kyrre

Abstract

Cross-border shopping of alcoholic beverages reduces domestic sales and tax revenue. We estimate the effects of cross-border shopping on sales of hard liquor and wine in the Norwegian government-owned retail monopoly (Vinmonopolet) by using the travel restrictions during the COVID-19 pandemic as a natural experiment. The effects are identified by using a dynamic difference-in-differences approach comparing changes in sales in stores with different driving times to the nearest foreign alcohol store. A new robust estimation method that addresses weaknesses of the commonly used two-way fixed-effects estimator is used. Cross-border shopping effects are identified within 90 min driving time to the nearest foreign alcohol store. In this area, the increased sales in Vinmonopolet are estimated to be 56 % for wine and 35 % for hard liquor due to unavailability of cross-border shopping. These increases correspond to 5 % and 4 % of national sales, respectively, and correspond to half a billion NOK in increased annual tax revenue.

Suggested Citation

  • Bjørkås, Eivind & Rickertsen, Kyrre, 2026. "Cross-border shopping of alcoholic beverages: Evidence from a natural experiment," Food Policy, Elsevier, vol. 138(C).
    • Handle: RePEc:eee:jfpoli:v:138:y:2026:i:c:s0306919225002295
    DOI: 10.1016/j.foodpol.2025.103024
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    References listed on IDEAS

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • F15 - International Economics - - Trade - - - Economic Integration
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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