Work

The Effects of Alcohol Excise Tax Increases by Drinking Level and by Income Level

Year: 2022

Type: report

Abstract: The alcohol industry argues that alcohol excise taxes do not reduce heavy drinking because of substitutions to lower-cost products and that these taxes disproportionately burden low-income drinkers.Alternatively, some economists have argued that increases in alcohol excise taxes reduce heavy alcohol consumption.Using data from the Nielsen Homescan we investigate the effects of a large excise tax increase that raised alcohol prices.The results show that heavy drinkers reduce purchases, and this reduction is no different than the reductions by other drinkers.The results also show that only low-income drinkers pay more for ethanol after the tax increase.

Source: National Bureau of Economic Research

DOI: 10.3386/w30097

Authors: Henry Saffer, Markus Gehrsitz, Michael Grossman

Institutions: National Bureau of Economic Research, University of Strathclyde, City University of New York

Language: English

Topic: Global Public Health Policies and Epidemiology

Subfield: Organizational Behavior and Human Resource Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Good health and well-being, Reduced inequalities

Open Access status: green

Funders: University of Chicago, Booth School of Business, University of Chicago, National Institute on Alcohol Abuse and Alcoholism