Fiscal Regressivity and Allocative Inefficiency: The Economic Cost of Thailand’s 2024 Wine Tax Reform

Thailand’s 2024 excise tax reform aimed to stimulate the tourism economy through the elimination of import tariffs and the reduction in excise rates on wine. This study evaluates the causal economic and distributional impacts of this policy intervention. The analysis employs a quasi-experimental Doubly Robust Difference-in-Differences (DR-DiD) estimator on a stratified cluster sample to isolate shifts in consumption expenditure, volume, and net ethanol intake. Results indicate a null effect for the general population, which confirms that the price floor remained prohibitive for median earners despite the tax reduction. The top income quintile conversely exhibited a statistically significant “additive premiumization” effect characterized by a surge in wine quantity without the substitution of other beverage categories. This behavioral shift generated a substantial Net Economic Loss driven by the divergence between foregone tax revenue and projected human capital productivity losses. The policy consequently functioned as a regressive fiscal transfer to the elite and created severe allocative inefficiency. These findings suggest that ad valorem tax incentives for luxury goods in emerging markets generate deadweight loss. Future policy strategies should therefore prioritize specific volumetric taxation to align fiscal incentives with public health objectives.