PAM_4380_april_1_2011

PAM_4380_april_1_2011 - Alcohol Taxation 4/1/2011 Alcohol...

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Alcohol Taxation 4/1/2011 Alcohol taxation Pass-thru to prices Impact of prices on alcohol consumption & alcohol-related problems Monday: “Effect of Alcohol Tax Increase on Alcohol-Related Disease Mortality in Alaska” (Wagenaar et al, AJPH August 2009) Taxing snack foods (next week) Homework #5 due Wednesday (04/06/11)
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Alcohol Tax Pass-Thru Chain of causality: alcohol taxes → prices → ↓ alcohol consumption → ↓ alcohol-related problems Some studies estimate tax → outcome Some studies estimate price → outcome My study of Alaskan tax hike estimates tax → price
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Rate of Tax Pass-Thru (α) Perfect competition, constant MC: α = 1 Imperfect competition Oligopoly/ game theory Different theoretical models predict α > 1, or α < 1 Evidence that α ≠ 1 → market not competitive Some previous empirical studies suggest α > 1 for alcohol, cigarette taxes
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Study of Alaskan Tax Hike Oct. 1, 2002 Alaska tax per standard serving Beer tax: 7 cents Wine tax:
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This note was uploaded on 04/28/2011 for the course PAM 4380 taught by Professor Kenkel during the Spring '08 term at Cornell.

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PAM_4380_april_1_2011 - Alcohol Taxation 4/1/2011 Alcohol...

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