Effects of Alcohol Taxation on Prices: A Systematic Review and Meta-Analysis of Pass-Through Rates

Jon P. Nelson, John R. Moran

Research output: Contribution to journalReview article

Abstract

This paper conducts the first review and meta-analysis for estimates of alcohol excise tax pass-through rates. A total of 30 empirical studies are examined. Several widely cited studies indicate substantial overshifting, suggesting imperfectly-competitive markets for alcohol. The narrative review provides insights for data coverage by country; econometric models; and results for under- or overshifting by beverage. Weighted-averages calculated for two samples show that beer taxes are overshifted and wine-spirits taxes are fully shifted. Meta-regressions corrected for publication bias indicate, however, that full-shifting cannot be rejected for any beverage. Results are useful for alcohol tax policy and future research on optimal taxation and incidence.

Original languageEnglish (US)
Article number20190134
JournalB.E. Journal of Economic Analysis and Policy
Volume20
Issue number1
DOIs
Publication statusPublished - Jan 1 2020

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All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)

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