We investigated the relationship between state excise taxes and liquor prices in eight states, using 2012 data for 45 brands. We made 6,042 price observations among 177 liquor stores with online prices.
Using a hierarchical model, we examined the relationship between excise taxes and product prices.
State excise taxes were significantly related to liquor prices, with an estimated pass-through rate of 0.93. The proportion of price accounted for by excise taxes averaged 7.0%.
We find that excise taxes do increase the price of alcohol, but states are not taking advantage of this opportunity to reduce alcohol-related morbidity and mortality.
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