Research

Abstract: We study the incidence of county-level grocery sales taxes across the United States from 2010 to 2019. We find substantial grocery tax over-shifting to consumers. On average, a grocery tax that generates $1 in grocery tax revenue leads to a $1.44 rise in tax-inclusive consumer food prices. This tax over-shifting is even higher for lower-income households and shoppers at discount and dollar stores. The grocery tax incidence varies significantly among foods, with over-shifting highest for perishable staples. The increased retail margins arising from grocery tax over-shifting do not translate into increased earnings for food retail workers nor higher farmgate prices for farmers.

Abstract: This paper evaluates the short-lived sugar-sweetened beverage (SSB) tax implemented in Cook County, Illinois. Unlike most U.S. SSB taxes, which are embedded upstream in distributor prices, Cook County’s tax was collected directly at the point of sale (POS). This made the tax highly visible to consumers but exempt from SNAP users under federal rules. Using Nielsen Consumer Panel data from 2017 to 2018 and a difference-in-differences (DiD) design, we find that Cook County’s SSB tax led to a significant drop in purchases of taxed beverages among general (non-SNAP) consumers, particularly for regular soda and family-size beverages. The effects faded within two months after the tax repeal. SNAP households exhibited little change in purchasing behavior, likely due to their exemption from the tax and its reduced salience at checkout. In contrast to observed impacts of SSB taxes in other jurisdictions, our findings suggest that Cook County’s point-of-sale design may weaken its effectiveness among low-income populations and make its effects less durable once the policy is repealed.

Abstract: This paper investigates how grocery price fluctuations shape the use of public and private food assistance in a six-county region of New York State. Using administrative data from the Food Bank of the Southern Tier and detailed grocery price indices, I examine how rising prices affect participation in the Supplemental Nutrition Assistance Program (SNAP) and subsequent reliance on food pantries. The findings show that increases in the price of key grocery categories are associated with earlier depletion of SNAP benefits and increased pantry visits. The analysis highlights how specific product-level price changes shift consumption behavior and suggests that food pantries can play a complementary role to SNAP by targeting high-price, high-need items.

Abstract: In this study, we examine linkages between non-competitive pricing behavior and cost pass-through patterns in markets for roasted coffee in the United States and Germany, the two largest coffee-importing countries. We develop a structural supply-demand model rooted in the new empirical industrial organization (NEIO) framework. We employ an iterative generalized method of moments (GMM) for estimation to evaluate the degree of market power. Subsequently, we use a threshold error correction model (TECM) to test whether the time-dependent market power measure influences cost pass-through behavior in the two countries. We find that the roasted coffee markets in both countries are oligopolistic. The degree of market power is stronger in Germany than in the United States, supporting the market observation that the German roasted coffee supply chain is more concentrated than in the United States. We find that market power leads to an increase in the pass-through rates when international prices are rising, but it has a modest effect on pass-through rates when they are falling. These results provide evidence of ”rockets and feathers” behavior in retail pricing in both countries. The ”rockets and feathers” phenomenon seems to be mainly caused by the exertion of market power in the United States. In contrast, other factors different than market power seem to also lead to this conventional phenomenon in Germany.

Abstract: The importance of understanding taxation and its effects on economic agents is paramount. However, there is a scarcity of literature exploring how changes in grocery taxation can affect retailers’ pricing strategies and sales volumes. In this study, we employ Nielsen Retail Scanner Data for shelf-stable fluid milk over a 12-month period in 2013, leveraging the reduction of the state grocery tax on July 1st in Tennessee, West Virginia, and Kansas as the event of interest. Through a Difference-in-Differences analysis, we investigate the treatment effect of the grocery tax reduction on retailers’ sales volumes and pricing for shelf-stable fluid milk. Our findings indicate that the reduction in grocery tax led to an overall decrease in price by 3.05% and an increase in sales volume by 8.87%. We attribute the price reduction to market power and the substitution effects across different channels. Further analysis reveals that the predominant negative impact on price comes from conventional grocery stores, whereas convenience stores exhibit a positive effect on pricing. Meanwhile, we do not observe significant price changes from drug stores and mass merchandisers, indicating that chain retailers adopt a uniform pricing strategy.

Abstract: Though there is a large literature on the incidence of public redistributive transfers and the effectiveness of private food assistance programs, little empirical research exists that examines the possible channels that impact food availability through food pantries. This article empirically examines the effect of food prices on local private donations to food banks from grocery retailers. Results indicate that increases in food prices discourage grocery retailers from donating in both volume and quality terms, creating another mechanism through which food price increases may worsen local food security and reduce the dietary diversity of local food pantry users.