Market heterogeneity and the distributional incidence of soft-drink taxes: evidence from France

Regressive sin taxes, with an application to the optimal soda tax

Fabrice Etilé, Sébastien Lecocq and Christine Boizot-Szantai

European Review of Agricultural Economics, 2021, vol. 48, issue 4, 915-939

Abstract: Market heterogeneity may affect the distributional incidence of nutritional taxes if households sort by income across markets with different characteristics. We use scanner data to analyse the distributional incidence of the 2012 French soda tax on Exact Price Indices that measure consumer welfare from the price and availability of soft-drinks at a local level. While the average pass-through was small—about 45 per cent—, tax incidence was significantly higher in low-income and less-competitive markets. Market heterogeneity ultimately has substantial distributional effects: it accounts for at least 33 per cent of the difference in welfare variation between low- and high-income consumers.

Keywords: France; soft-drink tax; tax incidence; inequality; market structure; consumer price index (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Market heterogeneity and the distributional incidence of soft-drink taxes: evidence from France (2021)
Working Paper: Market heterogeneity and the distributional incidence of soft-drink taxes: evidence from France (2021)
Working Paper: Market Heterogeneity and the Distributional Incidence of Soft-drink Taxes: Evidence from France (2019)
Working Paper: Market Heterogeneity and the Distributional Incidence of Soft-drink Taxes: Evidence from France (2019)
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