Zheng, Yuqing*

Yuqing Zheng Research Group

Quantifying Grocery Tax Impacts:  Evidence from Natural Experiments in the South

Grocery taxes (sales taxes imposed on groceries) exist in about one-third of U.S. states; however, their impacts on food consumption are little known to us. In the recent years, several states in the South have lowered grocery tax rates multiple times. In this paper, we exploit such variations in the states of Arkansas, South Carolina, and Tennessee to examine how grocery taxes affected the consumptions of select representative food products: apples (for fruits), potatoes (for vegetables), milk, and soda (for beverages). Applying the difference-in-differences estimator to the Nielsen retail level scanner data for 2006 through 2015, we expect to find that a lower tax rate increased demand in most of our cases.

Personnel:

Yuqing Zheng, Assistant Professors, Department of Agricultural Economics

Steven Buck, Assistant Professors, Department of Agricultural Economics

Computational Methods:

If using SAS, we plan to use proc surveyreg, proc hplmixed, and proc genmod procedures to run regressions. Our regression will have 1) 120,000 coefficients (that we will ask the model to estimate but not report), and 2) cluster standard errors.  The above three procedures should be able to take of these needs. These should be included in the most recent version of SAS.

Software:

SAS

Students:

None

Grants:

None

Publications:

None