Simon Loretz (Project co-ordinator)
Preiselastizität und potentielle Steuereinnahmen für alkoholische Getränke. Evidenz für Polen, Frankreich und Spanien (Price Elasticity and Implied Tax Revenue Effects for Alcoholic Beverages. Evidence from Poland, France and Spain)
Completed research studies
Commissioned by: Institute for Advanced Studies
Study by: Austrian Institute of Economic Research
Closed: 2018
In Europa ist ein Trend zu einer höheren Besteuerung von alkoholischen Getränken zu beobachten. Während typischerweise argumentiert wird, dass dies notwendig ist um den übermäßigen Konsum und die damit verbundenen Gesundheitskosten zu senken, steht oft auch das Motiv der Erzielung von Steuereinnahmen im Mittelpunkt. Alkoholische Getränke werden sehr unterschiedlich besteuert, gebrannte alkoholische Getränke etwa viel höher als Bier oder Wein. Die zugrundeliegende Idee der doppelten Dividende, d. h. die Möglichkeit Steuereinnahmen zu erzielen und gleichzeitig sozial unerwünschtes Verhalten einzudämmen, erscheint attraktiv. Ob es jedoch möglich ist, zusätzliche Steuereinnahmen durch die Besteuerung von alkoholischen Getränken zu erzielen und/oder den übermäßigen Konsum zu senken, hängt vor allem vom Funktionieren des Marktes für alkoholische Getränke ab. Die vorliegende Studie beleuchtet daher den Markt für alkoholische Getränke und das Potential der Erhöhung der Steuereinnahmen. Der Einfluss der Besteuerung auf den Konsum wird vor allem von der Durchreichung der Steuerlast (Weitergabe über höhere Preise) und der Elastizität der Nachfrage nach alkoholischen Getränken (Effekt von Veränderungen des Verbraucherpreises auf die Nachfrage) bestimmt. Zusätzlich können die Kreuzpreiselastizitäten zwischen unterschiedlichen alkoholischen (Bier, Wein und gebrannter Alkohol) und nicht alkoholischen Getränken potentiell den Einfluss von Steueränderungen bestimmen. Die Studie schätzt die wichtigsten Parament für ausgewählte EU–Länder. Besonderes Augenmerk liegt dabei auf unterschiedlichen Konsumtypen (leichter, mäßiger und starker Konsum) und sozioökonomische Gruppen. Anhand der geschätzten Parameter werden die potentiellen Steuereinahmen von möglichen Reformen simuliert.
Research group:Macroeconomics and European Economic Policy

Price Elasticity and Implied Tax Revenue Effects for Alcoholic Beverages. Evidence from Poland, France and Spain
In Europe a trend towards higher taxation of alcoholic beverages can recently be observed. While it is typically argued that higher taxation of alcohol is necessary to curb excessive consumption and its associated health costs, a tax revenue motive is very often ongoing in the background. Moreover, alcoholic beverage types are taxed very differently and in most cases, spirits drinks are much higher taxed than beer or wine. The underlying idea of a double dividend, i.e., the possibility of raising tax revenues while reducing socially unwanted behaviour, appears to be attractive for many policy makers. However, whether it is possible to raise additional tax revenues from the taxation of alcoholic beverages and/or reducing excessive consumption crucially depends on the functioning of the market for alcoholic beverages. The aim of this study is therefore to shed more light on the functioning of the market for alcoholic beverages and the implied potential to raise tax revenues. The key parameters which determine the impact of taxation on the consumption are the price pass-through of the tax burden and the price elasticity of demand for alcoholic beverages. The price pass-through quantifies the extent to which excise duties and tax increases are passed on to the consumer price, whereas the price elasticity of demand measures the effect of consumer price changes on demand. Additionally, the cross-price elasticity between different types of alcoholic beverages (beer, wine and spirits) as well as non-alcoholic drinks can potentially impact the effects of tax changes on consumption, as some goods are seen as complements while others act as substitute to each other. This study aims at estimating the main parameters for selected EU countries. A special emphasis is put on identifying price elasticities over different drinking behaviours (light, moderate and heavy drinkers) and socio-economic groups (high, medium, low income). Based on the estimated parameters the tax revenue effects for different tax reform scenarios can be simulated for each country.

Related issues

Simon Loretz (Project co-ordinator)
Ein Modell der Steuereinnahmen aus Alkoholsteuern für Tschechien (Set-up of an Alcohol Excise Tax Revenue Model for the Czech Republic)
Completed research studies
Study by: Austrian Institute of Economic Research
Commissioned by: Union of Czech Spirits Producers and Distributors
Closed: 2019
Im Rahmen des Projektes wird ein Modellierungstools für die Schätzung von Steuereinnahmen aus spezifischen Alkoholsteuern an die Gegebenheiten des tschechischen Marktes angepasst.
Benjamin Bittschi, Ines Fortin, Sebastian Koch, Richard Sellner, Simon Loretz, Gregor Zwirn
WIFO Working Papers, 2019, (579), 97 pages
Online since: 11.04.2019 0:00
The study estimates the tax revenue effects of changes in alcohol excise taxes for Spain, France and Poland. In addition to excise tax and VAT revenue effects, the price pass-through and the impact on market volumes is estimated. The main parameters – the tax pass-through rate of excise duties to consumer prices and the price elasticities of demand for alcoholic beverages – are estimated via state-of-the-art econometric approaches based a combination of household-levels and macro data. In a first step, the literature survey finds very diverse estimates for price elasticities of alcoholic beverages. We find evidence that excise taxes are typically fully passed onto consumer prices. Using micro data at the household level, we find price elasticities of demand for Spain, France and Poland which are higher (in absolute terms) than those typically found in the literature. This implies that price increases lead to larger drops in sales volume and, thus, tax increases might not result in the expected additional tax revenues. A macro level estimation of the relation between excise tax rates and revenues confirms a Laffer-curve type relationship, i.e., tax revenues cease to increase if excise tax rates reach a certain threshold level. The empirical evidence in this study suggests that the tax rates for beer and wine are well below this revenue maximising saddle point, but the evidence is inconclusive for spirits in the countries in question. Using the simulation tool developed in this study, it is found that a 1 percent increase in the excise tax rates of each alcoholic beverage prevailing in 2017 in each of the countries will have the strongest negative effect on the market volumes of spirits, while for beer and wine these increases translate to by and large higher collected tax revenues. Noteworthily, in some scenarios excise tax increases result in decreases in VAT revenues due to a significant reduction in the higher value on-trade sales.