American Economic Journal: Economic Policy
no. 3, August 2023
According to theory, "sin taxes" are welfare improving if consumers with low self-control respond at least as much to the tax as consumers with high self-control. We investigate empirically if demand response to soft drink and fat tax variations in Denmark depends on consumers' self-control. We use a unique home-scan panel that includes a survey measure of self-control. When taxes increase, consumers with low self-control reduce purchases less strongly than consumers with high self-control. When taxes decrease, both groups increase their purchases similarly. The results show an asymmetry in price elasticities by self-control that is more pronounced when taxes increase.
Schmacker, Renke, and Sinne Smed.
"Sin Taxes and Self-Control."
American Economic Journal: Economic Policy,
Consumer Economics: Empirical Analysis
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
Business Taxes and Subsidies including sales and value-added (VAT)
Fiscal Policies and Behavior of Economic Agents: Household
Health: Government Policy; Regulation; Public Health
Food; Beverages; Cosmetics; Tobacco; Wine and Spirits