Cross-border shopping of alcohol – What is the effect on tax revenue and sales and which products are most affected?

Richard Friberg (richard.friberg@hhs.se), Frode Steen and Simen Ulsaker
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Richard Friberg: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, Department of Economics, Universitetsvägen 10A, 106 91 Stockholm, Sweden, http://www.richardfriberg.se/

No 12/2024, Discussion Paper Series in Economics from Norwegian School of Economics, Department of Economics

Abstract: We use COVID-19 border closings and comprehensive store-level data on Norwegian alcohol sales to quantify the effect cross-border shopping of alcohol on sales volume and commodity tax revenue. Effects are large, for instance we estimate that commodity tax revenue for wine is about 20% lower because of cross-border shopping. Using product level data we establish that effects come from across all products rather than just a few, but effects are especially marked for bag-in-box wines. Neither availability of the exact same product in Sweden nor idiosyncratic product-level price difference with respect to Sweden has any marked effect on the impact of cross-border shopping on sales.

Keywords: Cross-border shopping; Commodity taxes; Excise taxes; Tax Competition (search for similar items in EconPapers)
JEL-codes: D62 F15 H20 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2024-07-04
New Economics Papers: this item is included in nep-pbe and nep-ure
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