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The Motivation for Alcohol Reward: Predictors of Progressive-Ratio Intravenous Alcohol Self-Administration in Humans

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Driven to drink: Sin taxes near a border.

Timothy K M Beatty¹, Erling Røed Larsen, Dag Einar Sommervoll

¹Department of Economics, University of York, UK. tb526@york.ac.uk

Journal of Health Economics

|October 27, 2009

Summary

Large differences in alcohol and tobacco taxes near international borders encourage tax avoidance. This behavior can hinder government revenue and public health objectives.

Area of Science:

Health Economics
Consumer Behavior Analysis
Public Policy

Background:

International border regions experience unique economic pressures.
Tax differentials on goods like alcohol and tobacco can influence consumer choices.
Governments utilize excise taxes to regulate consumption and generate revenue.

Purpose of the Study:

To investigate household purchasing behavior concerning alcohol and tobacco taxes.
To quantify tax avoidance behavior in response to tax differentials near international borders.
To assess the impact of tax avoidance on government revenue and policy goals.

Main Methods:

Utilized novel supermarket scanner data and consumer expenditure data.
Matched data to analyze purchasing patterns of households and sales of retail stores.

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Employed statistical analysis to compare sales and consumption near and far from the border.

Main Results:

Stores near the international border showed significantly lower sales of beer and tobacco compared to stores farther away.
Households residing near the border reported higher consumption of these goods, consistent with lower prices.
Externalities associated with alcohol and tobacco consumption were found to be higher in border regions.

Conclusions:

Significant tax differentials near international borders drive economically impactful tax avoidance.
Tax avoidance behavior can impede government revenue generation and undermine public health policies.
Understanding cross-border purchasing behavior is crucial for effective tax and health policy design.