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Publications
Cross-border shopping of alcoholic beverages: Evidence from a natural experiment
with Kyrre Rickertsen. Food Policy. Forthcoming. [preprint] [replication scripts]
Cross-border shopping of alcoholic beverages: Evidence from a natural experiment
with Kyrre Rickertsen. Food Policy. Forthcoming. [preprint] [replication scripts]
Abstract
Cross-border shopping of alcoholic beverages reduces domestic sales and tax revenue. We estimate the effects of cross-border shopping on sales of hard liquor and wine in the Norwegian government-owned retail monopoly (Vinmonopolet) by using the travel restrictions during the COVID-19 pandemic as a natural experiment. The effects are identified by using a dynamic difference-in-differences approach comparing changes in sales in stores with different driving times to the nearest foreign alcohol store. A new robust estimation method that addresses weaknesses of the commonly used two-way fixed-effects estimator is used. Cross-border shopping effects are identified within 90 minutes driving time to the nearest foreign alcohol store. In this area, the increased sales in Vinmonopolet are estimated to be 56% for wine and 35% for hard liquor due to cross-border shopping unavailability, corresponding to 5% and 4% of overall sales in Norway. These sales increases correspond to half a billion NOK in annual tax revenue.
Figure: Driving time and changes in liters sold in Vinmonopolet
Notes: The average total effect per unit of treatment for six 15-minutes driving bins. The estimates and standard errors are transformed by the exponential formula to be interpreted as percentage changes.
Working papers
From forecast to frontline: Optimizing staffing for an alcohol retail monopolist
with Ritvana Rrukaj.
From forecast to frontline: Optimizing staffing for an alcohol retail monopolist
with Ritvana Rrukaj.
Abstract
In companies where success depends on balancing staffing efficiency with service quality, accurate forecasts of future demand are crucial. We study an example of this and develop a dual-scale Seasonal Autoregressive Integrated Moving Average with Exogenous Regressors (SARIMAX) forecasting model to inform planning and staffing decisions in Vinmonopolet, the Norwegian retail monopolist for off-premises sales of wine and hard liquor. Our out-of-sample forecasts underpredict the aggregated national sales in 2024 by 2.4%. If Vinmonopolet staffed according to our store level forecasts it would be closer to the optimal staffing levels, balancing cost efficiency against desired service quality, than the actual staffing in 2024.
Figure: Staffing numbers for Store 1
Notes: Optimal staffing is based on a liter per hour (LPH) measure used by Vinmonopolet. The forecasted hours is based on the out-of-sample liter forecast and the LPH measure. Dashed lines represent 80% prediction intervals (PI).
Tax expenditures and behavioural responses: The case of duty-free exemptions
with Odd E. Nygård. [download]
Tax expenditures and behavioural responses: The case of duty-free exemptions
with Odd E. Nygård. [download]
Abstract
Tax expenditures are the losses in revenue from exempting parts of the tax base from taxation. The conventional method for computing tax expenditures disregards behavioural effects. Using an empirically based demand model, we simulate two reform scenarios that repeal current tax expenditures related to on-arrival duty-free sales of alcohol and tobacco in Norway. The model includes both recorded and unrecorded consumption, tracking all demand responses and their impacts on the tax base. Our results suggest that incorporating these behavioural effects reduces tax expenditures calculated by the conventional approach by more than one third.
Presented at:
Figure: Consumtion of pure alcohol (1,000 liter)
Notes: The figure illustrates the estimated consumption of alcohol from recorded (taxed) and unrecored (untaxed) sources pre-reform and in the two reform scenarios. Reform 1 repeals duty-free sales upon arrival at Norwegian airports. Reform 2 sets the personal allowances for alcohol and tobacco to zero and repeals duty-free sales upon arrival at Norwegian airports. Pure alcohol figures are calculated based on the average alcohol by volume observed in recorded consumption.
Work in progress
Tax incidence in a rule-based market
With James Prieger.
Upcoming presentations: Nordic Public Policy Symposium 2025
Presented at: Skatteforum 2025 [SLIDES], the 46th annual meeting of the Norwegian Association of Economists, Skatteforum 2024
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