Free the period? Evaluating tampon tax reforms using household scanner data

• prices decrease by 10–13 % post a value added tax reduction for period products. • full pass through to consumers 12 months after the implementation of the reform. • for some countries prices already react with the announcement of the reform. • no overall volume effect, but low-income households benefit through stimulated demand. • households switch to higher quality products as a result of the tax reform. We study price and volume effects of value-added tax (VAT) reductions for period products. We exploit varying treatment intensities and timing in several European countries and find that prices decrease by 10–13 %. This corresponds to full pass-through 12 months after the VAT reduction. The average effect on aggregate purchase volumes is statistically zero, and we find no evidence that low-income households are disproportionately affected by the reforms. We find homogeneous pass-through for market- and product-level competition measures and provide suggestive evidence that households’ propensity to purchase branded products increases in the months after the tax reform.