Measuring Consumer Responses to a Bottled Water Tax Policy

16 Pages Posted: 15 Apr 2020

See all articles by Peter Berck

Peter Berck

University of California, Berkeley - Department of Agricultural & Resource Economics

Jacob Moe‐Lange

affiliation not provided to SSRN

Sofia Berto Villas-Boas

University of California, Berkeley - Agricultural & Resource Economics

Andrew Stevens

University of California, Berkeley

Date Written: July 2016

Abstract

Using panel data of retail purchases, we measure the effects of the introduction, and later removal, of a bottled‐water tax in the state of Washington. We use a difference‐in‐differences approach to measure effects of the tax against untreated stores (in comparable control states) and untreated weeks (the pre‐period). We further estimate triple‐difference specifications comparing bottled water to juice and milk substitute products. Our results show that, when imposed, the tax causes bottled water sales to drop by nearly 6% in our preferred specification. Sales never fully recover, even after the tax removal. In terms of the heterogeneity of this effect, we find larger quantity drops in high tax rate areas and in the lowest and highest quintile income areas.

Keywords: Taxes, difference‐in‐differences, plastic bottles

Suggested Citation

Berck, Peter and Moe‐Lange, Jacob and Villas-Boas, Sofia and Stevens, Andrew, Measuring Consumer Responses to a Bottled Water Tax Policy (July 2016). American Journal of Agricultural Economics, Vol. 98, Issue 4, pp. 981-996, 2016, Available at SSRN: https://ssrn.com/abstract=3575997 or http://dx.doi.org/10.1093/ajae/aaw037

Peter Berck

University of California, Berkeley - Department of Agricultural & Resource Economics ( email )

Berkeley, CA 94720
United States

Jacob Moe‐Lange

affiliation not provided to SSRN

No Address Available

Sofia Villas-Boas (Contact Author)

University of California, Berkeley - Agricultural & Resource Economics ( email )

310 Giannini Hall # 3310
Berkeley, CA 94720
United States
510-643-6359 (Phone)
510-643-8911 (Fax)

Andrew Stevens

University of California, Berkeley

310 Barrows Hall
Berkeley, CA 94720
United States

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