Scandinavian Working Papers in Economics
Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics
No 12/2024: Cross-border shopping of alcohol – What is the effect on tax revenue and sales and which products are most affected?
Richard Friberg (), Frode Steen () and Simen Aardal Ulsaker ()
Additional contact information
Richard Friberg: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, Department of Economics, Universitetsvägen 10A, 106 91 Stockholm, Sweden
Frode Steen: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Simen Aardal Ulsaker: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
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.
Keywords: Cross-border shopping; Commodity taxes; Excise taxes; Tax Competition
Language: English
44 pages, July 4, 2024
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