CHE Seminar Series: Who benefits from food tax exemptions in lower income settings? Evidence on pass-through and incidence
Tax exemptions for basic items exist worldwide, typically justified by governments as a way to reduce the cost of living for poorer households. We study the unanticipated removal of consumption taxes on selected food items in Papua New Guinea by conducting a difference-in-differences analysis using administrative data, a supermarket price census, web-scraped online prices, and a nationally representative, household phone survey panel. We find complete pass-through in formal supermarkets in central urban districts, where retail competition is strong, but no pass-through in informal stores or rural areas, where poorer households mainly shop. For every dollar of foregone revenue, only five cents accrued to the poorest quintile, while the richest quintile and store owners each accrued one-third of the benefits. This degree of regressivity was not unanticipated by 237 experts who participated in a prediction survey. Our findings demonstrate that food tax exemptions are inherently regressive in lower-income settings, due to high informality, substantial market segmentation, and positive income elasticity of demand for basic food.
Speaker profile
Christopher Hoy is an applied microeconomist working on development economics, political economy, and public finance. His research has been published in leading journals, including the American Economic Journal: Economic Policy, the Journal of Development Economics, and the Journal of Economic Behavior and Organization. His work has also been featured in major media outlets such as the New York Times, The Economist, and the BBC, and has been cited more than 2,000 times. He received the 2025 Sir Tony Atkinson Prize from the Society for the Study of Economic Inequality.
He is currently a McKenzie Research Fellow at the University of Melbourne, based in the Melbourne Institute, and is on external leave from the World Bank. He is affiliated with the MIT Poverty Action Lab (J-PAL), the World Bank Tax Data Lab (DATAX), the Institute for Fiscal Studies (IFS), and the Tax and Transfer Policy Institute. Before joining the World Bank as a Young Professional, he was a Research Fellow, equivalent to an Assistant Professor, at the Australian National University. He has also worked for a range of organisations, including UNICEF, ADB, ODI, J-PAL/IPA, and the Australian Government.
Weekly seminar series
As part of our Centre's vibrant research culture, we host a weekly seminar series. Visiting and invited researchers present current research relating to the economics of health and wellbeing, and the healthcare sector. Visitors are welcome to join these sessions where discussion and debate is encouraged.
For further information on our seminar series, please contact Trong-Anh.Trinh@monash.edu .
Event Details
- Date:
- 20 May 2026 at 12:00 pm – 1:00 pm
- Venue:
- Caulfield campus, Building C, level 1, room C1.21
- Categories:
- CHE Seminar; General
Description
Tax exemptions for basic items exist worldwide, typically justified by governments as a way to reduce the cost of living for poorer households. We study the unanticipated removal of consumption taxes on selected food items in Papua New Guinea by conducting a difference-in-differences analysis using administrative data, a supermarket price census, web-scraped online prices, and a nationally representative, household phone survey panel. We find complete pass-through in formal supermarkets in central urban districts, where retail competition is strong, but no pass-through in informal stores or rural areas, where poorer households mainly shop. For every dollar of foregone revenue, only five cents accrued to the poorest quintile, while the richest quintile and store owners each accrued one-third of the benefits. This degree of regressivity was not unanticipated by 237 experts who participated in a prediction survey. Our findings demonstrate that food tax exemptions are inherently regressive in lower-income settings, due to high informality, substantial market segmentation, and positive income elasticity of demand for basic food.
Speaker profile
Christopher Hoy is an applied microeconomist working on development economics, political economy, and public finance. His research has been published in leading journals, including the American Economic Journal: Economic Policy, the Journal of Development Economics, and the Journal of Economic Behavior and Organization. His work has also been featured in major media outlets such as the New York Times, The Economist, and the BBC, and has been cited more than 2,000 times. He received the 2025 Sir Tony Atkinson Prize from the Society for the Study of Economic Inequality.
He is currently a McKenzie Research Fellow at the University of Melbourne, based in the Melbourne Institute, and is on external leave from the World Bank. He is affiliated with the MIT Poverty Action Lab (J-PAL), the World Bank Tax Data Lab (DATAX), the Institute for Fiscal Studies (IFS), and the Tax and Transfer Policy Institute. Before joining the World Bank as a Young Professional, he was a Research Fellow, equivalent to an Assistant Professor, at the Australian National University. He has also worked for a range of organisations, including UNICEF, ADB, ODI, J-PAL/IPA, and the Australian Government.
Weekly seminar series
As part of our Centre's vibrant research culture, we host a weekly seminar series. Visiting and invited researchers present current research relating to the economics of health and wellbeing, and the healthcare sector. Visitors are welcome to join these sessions where discussion and debate is encouraged.
For further information on our seminar series, please contact Trong-Anh.Trinh@monash.edu .