Are Alcohol Excise Taxes Overshifted to Prices? Systematic Review and Meta-Analysis of Empirical Evidence From 29 Studies

41 Pages Posted: 1 May 2019

See all articles by Jon P. Nelson

Jon P. Nelson

Pennsylvania State University - College of the Liberal Arts - Department of Economic

John R. Moran

Penn State University

Date Written: January 6, 2019

Abstract

This paper conducts the first comprehensive review and meta-analysis for estimates of alcohol tax pass-through rates. The review examines data coverage by country; econometric models; and results for under- or overshifting by beverage. Several primary studies indicate substantial over-shifting of alcohol taxes. Median rates also suggest taxes are overshifted. Precision weighted-averages calculated for two samples show beer taxes are overshifted and wine-spirits taxes are fully shifted. Meta-regressions corrected for publication bias indicate, however, that full-shifting of alcohol taxes cannot be rejected for any beverage. Results are useful for alcohol tax policy and future research on tax incidence.

Keywords: Tax incidence, Excise taxes, Alcohol, Meta-analysis

JEL Classification: H22, I18, C54

Suggested Citation

Nelson, Jon P. and Moran, John R., Are Alcohol Excise Taxes Overshifted to Prices? Systematic Review and Meta-Analysis of Empirical Evidence From 29 Studies (January 6, 2019). Available at SSRN: https://ssrn.com/abstract=3354078 or http://dx.doi.org/10.2139/ssrn.3354078

Jon P. Nelson (Contact Author)

Pennsylvania State University - College of the Liberal Arts - Department of Economic ( email )

Kern Graduate Building
University Park, PA 16802-3306
United States
814-237-0157 (Phone)

HOME PAGE: http://econ.la.psu.edu/people/jpn

John R. Moran

Penn State University ( email )

116 Henderson Bldg.
Penn State University
University Park, PA 16802
United States

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