Taxing Under the Influence? Corruption and U.S. State Beer Taxes

30 Pages Posted: 30 May 2008

See all articles by Per G. Fredriksson

Per G. Fredriksson

University of Louisville - College of Business - Department of Economics; Institute for Corruption Studies

Stephan Gohmann

University of Louisville - College of Business - Department of Economics

Khawaja A. Mamun

Sacred Heart University

Date Written: April 16, 2008

Abstract

This paper examines the effect of state level corruption on state beer taxes in the United States. Our lobby group model predicts that corruption reduces the beer tax, but this effect is conditional on the level of alcohol-related vehicle deaths. Using a panel of state level data from 1982 to 2001, we find that increased corruption is associated with lower state beer tax rates. The magnitude of the effect, however, declines with increases in alcohol-related traffic deaths. Our findings suggest that future empirical work estimating the effect of alcohol taxes on alcohol-related traffic fatalities should treat alcohol taxes as endogenous.

Keywords: Alcohol Taxes, Corruption, Political Economy, Traffic Accidents

JEL Classification: D700, H200, H710

Suggested Citation

Fredriksson, Per G. and Gohmann, Stephan and Mamun, Khawaja A., Taxing Under the Influence? Corruption and U.S. State Beer Taxes (April 16, 2008). Louisville College of Business Research Paper No. 2008-01, Available at SSRN: https://ssrn.com/abstract=1139131 or http://dx.doi.org/10.2139/ssrn.1139131

Per G. Fredriksson (Contact Author)

University of Louisville - College of Business - Department of Economics ( email )

Louisville, KY 40292
United States

Institute for Corruption Studies

Stevenson Hall 425
Normal, IL 61790-4200
United States

Stephan Gohmann

University of Louisville - College of Business - Department of Economics ( email )

Louisville, KY 40292
United States

Khawaja A. Mamun

Sacred Heart University ( email )

5151 Park Avenue
Fairfield, CT 06432
United States

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