Taxes and Gender Equality: The Incidence of the 'Tampon Tax'

Abstract

This paper uses a permanent reduction of the "tampon tax" in Germany to study the price and unit-sales effects of the tax. Exploiting an extensive data set on the sales and scanner prices of feminine hygiene products in Germany and Italy, our results show that the incidence of tampon taxes is fully on consumers, while demand for these products is price-inelastic. We do not find cross-price effects for a closely related product group, which remained taxed at the standard tax rate. We conclude that reducing taxes on feminine hygiene products could be an effective measure to address "period poverty".

Keywords: Tax incidence, pass-through, gender equality, feminine hygiene products, period poverty JEL Classification: H22, H23, I38, J16