Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263544 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15328
Publisher: 
Institute of Labor Economics (IZA), Bonn
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.
Subjects: 
alcohol
excise tax
heavy drinking
low income
JEL: 
I18
H20
Document Type: 
Working Paper

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