Pass-through and competition: the impact of soft drink taxes as seen through Mexican supermarkets

In January 2014, Mexico addressed its epidemic of obesity by implementing an excise tax of 1 peso (1 MXN) per liter on soft drinks. This study evaluates the pass-through of the tax, the influence on the tax of competition among different stores, and the after-tax price dispersion. Using an unbalanced panel of weekly prices for 553 stores throughout Mexico, we estimate that the tax increases the per-liter price of soda by 1.12 pesos, of juice by...