EconPapers    
Economics at your fingertips  
 

Tax design in the alcohol market

Rachel Griffith (), Martin O'Connell and Kate Smith ()

No 11820, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study optimal corrective taxation in the alcohol market. Consumption generates negative externalities that are non-linear in the total amount of alcohol consumed. If tastes for products are heterogeneous and correlated with marginal externalities, then varying tax rates on different products can lead to welfare gains. We study this problem in an optimal tax framework and empirically for the UK alcohol market. Welfare gains from optimally varying rates are higher the more concentrated externalities are amongst heavy drinkers. A sufficient statistics approach is informative about the direction of reform, but not about optimal rates when externalities are highly concentrated.

Keywords: Alcohol; corrective taxes; externality (search for similar items in EconPapers)
JEL-codes: D12 D62 H21 H23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea, nep-pbe and nep-pub
Date: 2017-02
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=11820 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Tax design in the alcohol market (2019) Downloads
Working Paper: Tax design in the alcohol market (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:11820

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=11820

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2019-09-18
Handle: RePEc:cpr:ceprdp:11820