Empirical analysis of the impact of cigarette excise taxes on cigarette consumption: estimates from recent state-level data

Cebula, Richard J.; Foley, Maggie; Houmes, Robert

doi:10.1007/s12197-011-9207-6

Cited by 8 publications

(2 citation statements)

References 23 publications

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“…Tax and regulation differentials across U.S. states promote spillovers of the shadow or underground market through cigarette smuggling (see Goel and Saunoris (2016)). As discussed by Cebula et al (2014), tax hikes that reduce aggregate cigarette consumption do not account for the possible substitution from low nicotine to high nicotine cigarettes. Using similar reasoning, smokers may substitute away from the high cost legal cigarettes and instead purchase cigarettes underground.…”

Section: Introductionmentioning

confidence: 99%

Cigarette smuggling: using the shadow economy or creating its own?

Goel

Saunoris

2018

J Econ Finan

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Cigarette smuggling undermines policymakers' efforts to curb smoking while also leading to tax revenue leakages. Policymakers around the world are trying to obtain a better understanding of how to combat cigarette smuggling. This paper adds to the literature on cigarette demand and related smuggling by considering the cross-border influences of both the price differentials and the shadow economy. While price/tax differentials induce both casual and organized smuggling, the presence of the shadow economy facilitates smuggling and opens up possibilities for arbitrage in smuggled goods. Using data across U.S. states for the years 1997-2008, results show that border price effects are positive and statistically significant, and the average shadow economy in bordering states facilitates smuggling, with own shadow economy sometimes showing signs of facilitating intra-and cross-border smuggling. The other findings regarding the negative own-price elasticities and habit persistence for smoking are in line with the larger literature.

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Section: Introductionmentioning

confidence: 99%

Cigarette smuggling: using the shadow economy or creating its own?

Goel

Saunoris

2018

J Econ Finan

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“…First, using data from the NSDUH, we document that MMLs induce a 2 to 3 percentage-point increase in adult marijuana use. Turning to cigarette smoking, data from all three datasets show that the enactment of MMLs leads to an approximately 1 to 1.5 percentage-point decline in cigarette 3 While a wide body of research has examined the effects of cigarette taxes (Callison and Kaestner 2014;Cebula et al 2014;Hansen et al 2017;Carpenter and Cook 2008), informational campaigns (Adams et al 2011;Liu and Tan, 2009), and smoking bans (Bruderl and Ludwig 2011;Demperio, 2013;Sari 2013) on tobacco use, increased attention has been paid to how changes in the prices of related substances may generate spillover effects on tobacco use. See, for example, Cameron and Williams (2002);Farrelly et al (2001); Yoruk, (2011, 2013).…”

Section: Introductionmentioning

confidence: 99%