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Cross-border shopping of alcohol – What is the effect on tax revenue and sales and which products are most affected?

Author

Listed:
  • Friberg, Richard

    (Dept. of Economics, Stockholm School of Economics)

  • Steen, Frode

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Ulsaker, Simen Aardal

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

Abstract

We use COVID-19 border closings and comprehensive store-level data on Norwegian alcohol sales to quantify the effect cross-border shopping of alcohol on sales volume and commodity tax revenue. Effects are large, for instance we estimate that commodity tax revenue for wine is about 20% lower because of cross-border shopping. Using product level data we establish that effects come from across all products rather than just a few, but effects are especially marked for bag-in-box wines. Neither availability of the exact same product in Sweden nor idiosyncratic product-level price difference with respect to Sweden has any marked effect on the impact of cross-border shopping on sales.

Suggested Citation

  • Friberg, Richard & Steen, Frode & Ulsaker, Simen Aardal, 2024. "Cross-border shopping of alcohol – What is the effect on tax revenue and sales and which products are most affected?," Discussion Paper Series in Economics 12/2024, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2024_012
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    File URL: https://openaccess.nhh.no/nhh-xmlui/handle/11250/3138471
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    References listed on IDEAS

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    More about this item

    Keywords

    Cross-border shopping; Commodity taxes; Excise taxes; Tax Competition;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • F15 - International Economics - - Trade - - - Economic Integration
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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