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The impact of price changes on volume sales of alcoholic beverages in Sweden, 2006–2013

Author

Listed:
  • Hortlund, Per

    (HUI Research)

  • Mihaescu, Oana

    (HUI Research)

Abstract

We evaluate whether price elasticities on registered alcohol have changed in the last ten years in Sweden, in particular with regard to the investigation by Asplund et al (2007). We also investigate the fiscal effects of such changes. According to our estimates, price elasticities have increased, and these increases may have substantial effects on estimated changes in tax revenues when commodity tax rates are changed. In particular, commodity tax rates on spirits may have reached “Laffer territory” where tax increases may actually lower tax revenues.

Suggested Citation

  • Hortlund, Per & Mihaescu, Oana, 2016. "The impact of price changes on volume sales of alcoholic beverages in Sweden, 2006–2013," HUI Working Papers 115, HUI Research.
    • Handle: RePEc:hhs:huiwps:0115
    as

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    References listed on IDEAS

    as
    1. Pinelopi Koujianou Goldberg & Michael M. Knetter, 1997. "Goods Prices and Exchange Rates: What Have We Learned?," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1243-1272, September.
    2. Baltagi, Badi H & Griffin, James M, 1995. "A Dynamic Demand Model for Liquor: The Case for Pooling," The Review of Economics and Statistics, MIT Press, vol. 77(3), pages 545-554, August.
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    More about this item

    Keywords

    law of one price; optimal taxation; cross-border shopping; laffer curve; alcohol;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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