Are Excise Taxes on Beverages Fully Passed through to Prices? The Danish Evidence

U. Michael Bergman, Niels Lynggård Hansen*

*Kontaktforfatter af dette arbejde

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

Resumé

This paper studies tax shifting of excise taxes on alcoholic and nonalcoholic beveragesin Denmark. We use a unique data set collected by Statistics Denmark focusing on sixepisodes of tax changes: three tax cuts and three tax hikes. We find that excise taxeson beer and soda are overshifted but those on liquor are undershifted. We also findthat the pass-through is inversely related to the size of the tax change and that there areasymmetric effects of tax changes on soda. Finally, the tax pass-through on beer and sodais an increasing function of the distance to the German border
OriginalsprogEngelsk
TidsskriftFinanzarchiv
Vol/bind75
Udgave nummer4
Sider (fra-til)323-356
Antal sider34
ISSN0015-2218
DOI
StatusUdgivet - 2019

Emneord

  • Alcoholic beverages
  • Excise tax
  • Nonalcoholic beverages
  • Tax incidence

Citer dette

Bergman, U. Michael ; Hansen, Niels Lynggård. / Are Excise Taxes on Beverages Fully Passed through to Prices? The Danish Evidence. I: Finanzarchiv. 2019 ; Bind 75, Nr. 4. s. 323-356.
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Are Excise Taxes on Beverages Fully Passed through to Prices? The Danish Evidence. / Bergman, U. Michael; Hansen, Niels Lynggård.

I: Finanzarchiv, Bind 75, Nr. 4, 2019, s. 323-356.

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

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N2 - This paper studies tax shifting of excise taxes on alcoholic and nonalcoholic beverages in Denmark. We use a unique data set collected by Statistics Denmark focusing on six episodes of tax changes: three tax cuts and three tax hikes. We find that excise taxes on beer and soda are overshifted but those on liquor are undershifted. We also find that the pass-through is inversely related to the size of the tax change and that there are asymmetric effects of tax changes on soda. Finally, the tax pass-through on beer and soda is an increasing function of the distance to the German border.

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KW - Nonalcoholic beverages

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