Data and code for: Optimal sin taxation and market power

Principal Investigator(s):  View help for Principal Investigator(s) Martin O'Connell, UW-Madison; Kate Smith, London School of Economics

Version:  View help for Version V1

Name File Type Size Last Modified
  DataInputs 07/18/2023 01:47:PM
  DataTaxFiles 07/19/2023 09:46:AM
  EstimationOutputs 07/18/2023 01:48:PM
  ProgramsA 09/15/2023 07:12:PM
  ProgramsB 07/19/2023 09:52:AM
  ProgramsC 09/15/2023 07:13:PM
  Results 12/22/2022 02:13:PM
README.pdf application/pdf 361.7 KB 09/15/2023 03:10:PM

Project Citation: 

O’Connell, Martin, and Smith, Kate. Data and code for: Optimal sin taxation and market power. Nashville, TN: American Economic Association [publisher], 2024. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2024-08-23. https://doi.org/10.3886/E183642V1

Project Description

Summary:  View help for Summary Replication code for Optimal sin taxation and market power. Paper abstract: 
We study how market power impacts the efficiency and redistributive properties of sin taxation, with an empirical application to sugar-sweetened beverage taxation. We estimate a detailed equilibrium model of the UK drinks market, which we embed in a tax design framework to solve for optimal sugar-sweetened beverage tax policy. Positive price-cost margins on drinks create inefficiencies, which act to lower the optimal rate compared with a perfectly competitive setting. However, since profits mainly accrue to the rich, this is partially mitigated under social preferences for equity. Overall, ignoring market power when setting the optimal sugar-sweetened beverage tax rate leads to welfare gains that are 40% below those at the optimum. 
Funding Sources:  View help for Funding Sources Economic and Social Research Council (ES/T014334/1); Economic and Social Research Council (ES/VO13513/1); British Academy (pf160093)

Scope of Project

Subject Terms:  View help for Subject Terms Observation data
JEL Classification:  View help for JEL Classification
      D12 Consumer Economics: Empirical Analysis
      D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
      D61 Allocative Efficiency; Cost-Benefit Analysis
      D62 Externalities
      H21 Taxation and Subsidies: Efficiency; Optimal Taxation
      H23 Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
      L13 Oligopoly and Other Imperfect Markets
Geographic Coverage:  View help for Geographic Coverage Great Britain
Time Period(s):  View help for Time Period(s) 1/1/2008 – 12/31/2012
Collection Date(s):  View help for Collection Date(s) 1/1/2008 – 12/31/2012
Universe:  View help for Universe Households residing in Great Britain
Data Type(s):  View help for Data Type(s) other

Methodology

Data Source:  View help for Data Source Kantar FMCG Purchase Panel and Kantar Food-On-The-Go Survey
Unit(s) of Observation:  View help for Unit(s) of Observation Households

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Published Versions

V1 [2024-08-23]

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