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

U. Michael Bergman, Niels Lynggård Hansen*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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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.
Original languageEnglish
Issue number4
Pages (from-to)323-356
Number of pages34
Publication statusPublished - Dec 2019


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

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