Tax Pass-through in the European Beer Market

Aria Ardalan () and Sebastian Kessing
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Aria Ardalan: University of Siegen

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: We study the pass-through of indirect taxes on beer prices in the European Union (EU). Exploiting the variation of value added tax rates, beer excise tax rates, and beer prices in a panel of monthly data from 1996 to 2016 of all current 28 EU member states, we estimate the tax pass-through of specific beer excise taxes and ad valorem value added taxes, respectively. Ad valorem taxes are under-shifted at a rate of approximately 70%. Specific excise taxes are almost fully shifted to prices in the EU, but, in contrast to the empirical findings for the US, there is no evidence of over-shifting. Nevertheless, the difference between ad valorem and specific tax pass-through rates indicates that imperfect competition plays an important role in the European beer market.

Keywords: Tax incidence; Pass-through; VAT; Excise Taxes; EU. (search for similar items in EconPapers)
JEL-codes: H22 H23 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2017
New Economics Papers: this item is included in nep-eur, nep-pbe and nep-pub
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Tax pass-through in the European beer market (2021)
Working Paper: Tax pass-through in the European beer market (2019)
Working Paper: Tax Pass-Through in the European Beer Market (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201747

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