THE PASS-THROUGH OF BEER TAXES TO PRICES: EVIDENCE FROM STATE AND FEDERAL TAX CHANGES.

From a policy perspective, it is crucial to understand how changes in beer taxes affect retail beer prices. This study provides new evidence of the pass-through rate of state beer taxes to prices in a post-merger era. Our estimates that use state-level beer tax changes suggest that a 10-cent increase in beer taxes raises retail prices by about 17 cents. Comparable findings from the 1991 federal beer tax increase show a rise in retail beer prices of 19-22 cents. Our findings suggest that consumers fully bear the burden of increased beer taxes. ( JEL H2, I0, D4) [ABSTRACT FROM AUTHOR]

Copyright of Economic Inquiry is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)