| This collection of essays embodies developments in public economics on issues of taxation and retirement. In Chapter 1, I use retail price data of beer, wine and liquor and the variation in state taxes to measure tax incidence. I find that taxes are being significantly overshifted in beer and wine, while shifted one-for-one in liquor. Results have strong implication on the welfare analysis of optimal sin taxes, where previous estimates assuming perfect competition imply excessive alcohol taxes.; In Chapter 2, I determine the firm behavior consistent with patterns of tax overshifting by using beer scanner data and the 1991 federal tax increase. I find that beer prices rose by more than twice the amount of the tax. Using variation in brewer and retailer market concentration across geographic markets and the market structure of different product segments (popular, light, premium and superpremium), I test various hypotheses on firm behavior that explains tax overshifting. I reject static oligopoly models and the menu cost hypotheses. However, I find empirical results consistent with the story that the tax increase acted as a focal point for a tacitly collusive price increase.; In Chapter 3, I evaluate the "efficiency" of tax incentives on charitable contributions by consistently estimating the tax price elasticity of giving, i.e. how responsive is giving to changes in marginal tax rates which inversely affect the price of giving. John Shin and I analyze panel data on older-aged households, using the 1993 tax increase as our source of independent variation in tax price. We find that charitable contributions are not as price sensitive as previously estimated, and is actually insignificantly different from one.; We use the same panel to analyze portfolio allocation surrounding years of retirement in Chapter 4. We find that retirement has a significant and negative lagged effect on the share of stocks over liquid assets, driven primarily by its impact on the 'active' component of equity. However, we find no evidence that the lagged negative effect of retirement on portfolio shares is related to marital status and on our imputed measures of income risk.*; *Originally published in DAI Vol. 61, No. 5. Reprinted here with corrected author name. |
