Markus Gehrsitz

Department of Economics
University of Strathclyde
Strathclyde Business School
Duncan Wing
199 Cathedral Street
Glasgow G4 0QU
Tel: 0141 548 3960

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliations: University of Strathclyde and IZA

NBER Working Papers and Publications

May 2020The Effect of Changes in Alcohol Tax Differentials on Alcohol Consumption
with Henry Saffer, Michael Grossman: w27117
We show that tax-induced increases in alcohol prices can lead to substantial substitution and avoidance behavior that limits reductions in alcohol consumption. Causal estimates are derived from a natural experiment in Illinois where spirits and wine taxes were raised sharply and unexpectedly in 2009. Beer taxes were increased by only a trivial amount. We construct representative and consistent measures of alcohol prices and sales from scanner data collected for hundreds of products in several thousand stores across the US. Using several differences-in-differences models, we show that alcohol excise taxes are instantly over-shifted by a factor of up to 1.5. Consumers react by switching to less expensive products and increase purchases of low-tax alcoholic beverages, thus all but offsett...
July 2015The Effect of Post-and-Hold Laws on Alcohol Consumption
with Henry Saffer: w21367
This paper estimates the effects of post-and-hold laws on alcohol consumption and price. Post-and-hold laws require alcohol wholesalers to provide a list of prices to the state, which can be reviewed by retailers, competitors and the public. These laws were generally enacted at the end of prohibition with the intention of limiting alcohol consumption by raising prices. The laws may also have the unintended consequence of protecting small retailers. Recently, several large retailers have argued in court that these laws are counter to the Sherman Act, which limits anti-competitive behavior. This paper follows the recent paper by Cooper and Wright (2012) and adds new data and new statistical tests. Both difference-in–difference models and synthetic control models are employed. The esti...

Published: Saffer, Henry & Gehrsitz, Markus, 2016. "The effect of post-and-hold laws on alcohol consumption," International Review of Law and Economics, Elsevier, vol. 45(C), pages 63-71. citation courtesy of

NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us