Excise Tax Burden and Food Spending Behavior: Evidence from Single Middle-Aged Men in the U.S.

• In Event: Beyond the First Sip:New Insights into Consumer Response to Excise Taxes

Abstract

Excise taxes on tobacco and alcohol generate revenue and promote healthier behaviors but disproportionately burden low-income households, raising equity concerns. While their direct effects on consumption are well studied, their indirect impacts on essential expenditures such as food spending, a key indicator of dietary quality and household resilience, remain underexplored. This study examines how excise tax burdens affect food spending patterns among single middle-aged men in the U.S., a demographic group often overlooked yet uniquely vulnerable due to limited access to social safety nets and elevated consumption of taxed goods.
Using household-level data from the Current Population Survey Food Security Supplement (2010–2019) and state-level excise tax and consumption data, I estimate two-way fixed-effects models to assess how per-capita excise tax burdens influence food-at-home (FAH) and food-away-from-home (FAFH) expenditures. Interaction terms with national income quintiles identify heterogeneous effects by economic status.
Preliminary findings reveal no significant average effect of excise tax burden on overall food spending. However, subgroup analyses show that near-poor households ($15,000–$29,999) significantly reduce FAH spending in response to higher tax burdens, suggesting increased nutritional risk. In contrast, FAFH expenditures remain relatively unresponsive, reflecting constrained budget flexibility among lower-income individuals.
These findings highlight unintended regressive spillover effects of excise taxes on non-targeted consumption categories. This paper calls for more equitable fiscal policy design such as income-targeted subsidies or expanded nutrition assistance to mitigate adverse impacts on economically vulnerable populations while preserving the public health goals of excise taxation.

Author

• Yuwei Zhang, yzhan702@syr.edu