CERE Working Papers, CERE - the Center for Environmental and Resource Economics
Signaling Through Taxing America’s Sin: A Panel Data Study
Abstract: This article aims to examine how sin taxation changes
long-term consumer behavior regarding commodities which are deemed harmful
for both health and the environment. These include tobacco, alcoholic
beverages, sugar and confectionary, household energy, and motor fuel.
Specifically, we examine the signaling effect from taxation which is seen
if a tax increase leads to a significantly larger change in consumption
than a producer price change. The empirical analysis is conducted by a US
panel data study, during the period 1988-2012 for the four US census
regions, using the Almost Ideal Demand System (AIDS). We find the main
result to be that the signaling effect from taxation is significant for
tobacco (at the 10% significance level) as well as for electricity and
motor fuel (at the 5% significance level).
Keywords: taxation; signaling; public policy; regulation; legislation; almost ideal demand system; panel data; (follow links to similar papers)
JEL-Codes: C23; D12; H23; I18; (follow links to similar papers)
28 pages, June 30, 2014
Before downloading any of the electronic versions below
you should read our statement on
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
Questions (including download problems) about the papers in this series should be directed to Mona Bonta Bergman ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Design by Joachim Ekebom