Outstanding Paper Award for Public Finance Review

We are pleased to congratulate Javier Espinosa of Rochester Institute of Technology and William N. Evans of at the University of Notre Dame who have received Public Finance Review‘s Outstanding Paper Award for 2013. Their paper “Excise Taxes, Tax Incidence, and the Flight to Quality: Evidence from Scanner Data” appeared in the March 2013 issue of Public Finance Review.

PFR_72ppiRGB_powerpointEditor James Alm commented:

Their paper contributes important new empirical evidence on the effects of excise taxes.  When a taxed product has multiple characteristics (e.g., quality differences), a rise in an excise tax on the product may result in a substitution effect where consumers shift away from the product’s characteristics that are taxed toward other characteristics that go untaxed. Professors Espinosa and Evans focus on this issue by considering whether higher tax rates on cigarettes induce a shift to higher quality cigarettes.  Using high-frequency scanner data on cigarette sales from 812 stores covering twenty-nine states over a six-year period, they examine whether tax hikes encourage a flight to quality, estimating a longitudinal model with both state- and time-fixed effects.  Their results demonstrate that a one-cent hike in taxes increases retail prices of name-brand and generic cigarettes by exactly one cent.  They also find no tax-induced substitution toward name brands but a large substitution away from carton to pack sales, suggesting that tax hikes encourage within-product changes in purchase but little between-product substitution.  Their paper contributes in important ways both to the literature that examines the incidence of sales and excise taxes, and to the literature about whether excise taxes affect the quality of products purchased.

The abstract of  “Excise Taxes, Tax Incidence, and the Flight to Quality: Evidence from Scanner Data”:

Because excise taxes are independent of product price, rate hikes are predicted to lower the relative cost of high-priced goods, encouraging a shift toward their purchase. Using scanner data on cigarette sales from twenty-nine states over a six-year period, we examine whether tax hikes encourage a flight to quality. Results demonstrate that a one-cent hike in taxes increases retail prices of name-brand and generic cigarettes by exactly one cent. We find no tax-induced substitution toward name brands but a large substitution away from carton to pack sales, suggesting that tax hikes encourage within-product changes in purchase but little between-product substitution.

Read “Excise Taxes, Tax Incidence, and the Flight to Quality: Evidence from Scanner Data” from Public Finance Review for free by clicking here. Make sure to stay up to date on awards, articles and more from Public Finance Review by clicking here to sign up for e-alerts today!

This entry was posted in Awards, Economics, Finance, Scholarship and tagged , , , , , by Cynthia Nalevanko, Editor, Management INK. Bookmark the permalink.

About Cynthia Nalevanko, Editor, Management INK

Founded in 1965, SAGE is the world’s leading independent academic and professional publisher. Known for our commitment to quality and innovation, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students across a broad range of subject areas. With over 900 employees globally from principal offices in Los Angeles, London, New Delhi, Singapore, and Washington DC, our publishing programme includes more than 560 journals and over 800 books, reference works and databases a year in business, humanities, social sciences, science, technology and medicine. Believing passionately that engaged scholarship lies at the heart of any healthy society and that education is intrinsically valuable, SAGE aims to be the world’s leading independent academic and professional publisher. This means playing a creative role in society by disseminating teaching and research on a global scale, the cornerstones of which are good, long-term relationships, a focus on our markets, and an ability to combine quality and innovation. Leading authors, editors and societies should feel that SAGE is their natural home: we believe in meeting the range of their needs, and in publishing the best of their work. We are a growing company, and our financial success comes from thinking creatively about our markets and actively responding to the needs of our customers.

3 thoughts on “Outstanding Paper Award for Public Finance Review

  1. Here’s a tax related paper. you will not be able to get the full paper but you can read a nice summary of the findings.

    fdc

  2. Pingback: Read the Award-Winning Excise Tax Paper from Public Finance Review | SAGE Connection – Insight

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