Table 5:
Pass-through rates of excise liquor taxes to Cognac and Gin prices
| Prices | High Cognac | Low Cognac | High Gin | Low Gin | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | (10) | (11) | (12) | |
| FE model – dependent variable: Price (t) (N=180) | ||||||||||||
| Tax (t) | 0.35 (0.37) | 0.56 (0.36) | 1.92*** (0.26) |
−0.16 (0.43) | 0.03 (0.39) | 1.45*** (0.28) |
−0.17 (0.29) | −0.12 (0.26) | 0.71*** (0.19) |
−0.15 (0.3) | −0.1 (0.27) | 0.82*** (0.22) |
| Dynamic model – dependent variable: Price (t) (N=128) | ||||||||||||
| Tax (t) | 1.35*** (0.31) |
1.54*** (0.36) |
2.17*** (0.41) |
0.35 (0.28) | 0.5 (0.33) | 1.36*** (0.31) |
0.26+ (0.14) |
0.27+ (0.14) |
0.91* (0.35) |
0.36** (0.10) |
0.35** (0.1) |
0.91* (0.43) |
| Past tax (t−2) | −0.11 (0.41) | −0.02 (0.35) | 0.25 (0.38) | 0.8+ (0.39) |
0.86* (0.37) |
1.23** (0.43) |
0.13 (0.22) | −0.14 (0.21) | 0.43*** (0.08) |
0.21 (0.13) | 0.21 (0.13) | 0.43*** (0.11) |
| Future tax (t+2) | −1.56*** (0.4) |
−1.42*** (0.33) |
−0.56 (0.75) | −1.71*** (0.3) |
−1.62*** (0.29) |
−0.49 (0.31) | −0.99** (0.29) |
−0.98** (0.28) |
−0.4 (0.44) | −1.08*** (0.26) |
−1.09*** (0.26) |
−0.56 (0.56) |
| FD model – dependent variable: Δ Price (t- t−2) (N=154) | ||||||||||||
| Δ tax (t-t−2) | 1.7*** (0.24) |
1.73*** (0.24) |
2.17*** (0.22) |
0.84+ (0.44) |
0.89* (0.39) |
1.21** (0.40) |
0.56** (0.2) |
0.57** (0.18) |
0.79*** (0.16) |
0.65** (0.19) |
0.67** (0.17) |
0.92*** (0.13) |
| Demographics | No | Yes | Yes | No | Yes | Yes | No | Yes | Yes | No | Yes | Yes |
| Linear country-year trend | No | No | Yes | No | No | Yes | No | No | Yes | No | No | Yes |
Note:
+
p<0.1
*
p < 0.05
**
p < 0.01
***
p < 0.001. Standard errors clustered at the country level are in parentheses. FE and dynamic regressions control for year fixed effects, country fixed effects, and whether excise liquor tax rates are lower for small distillers. Demographic controls are GDP per capita, the percent of population aged 15-64, and the percent of population aged 65 and over. FD models control for the first differences of these covariates.