The Micro-Geography of Tax Avoidance: Evidence from Littered Cigarette Packs in Chicago

Merriman, David

doi:10.1257/pol.2.2.61

Cited by 120 publications

(135 citation statements)

References 8 publications

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“…These studies typically find cross-border shopping to be substantial in settings where price differences are large and geographic distances small. For instance, according to Merriman (2010) in the city of Chicago where the dollar amount total taxes on a pack of cigarettes is nearly four times as large as in some of the neighbouring counties in Illinois, a $2.65 difference in prices reduces the probability of finding a littered packet of cigarettes with the local Chicago stamp by 60%. This is likely to be an extreme example, but even in cases where individuals have to cross national borders, the extent of cross-country shopping may be substantial.…”

Section: Previous Literaturementioning

confidence: 99%

Cross-border health and productivity effects of alcohol policies

Johansson¹,

Pekkarinen²,

Verho³

2014

Journal of Health Economics

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This paper studies the cross-border health and productivity effects of alcohol taxes. We estimate the effect of a large cut in the Finnish alcohol tax on mortality, alcohol related illnesses and work absenteeism in Sweden. This tax cut led to large differences in the prices of alcoholic beverages between these two countries and to a considerable increase in cross-border shopping. The effect is identified using differences-indifferences strategy where changes in these outcomes in regions near the Finnish border are compared to changes in other parts of northern Sweden. We use register data where micro level data on deaths, hospitalisations and absenteeism is merged to population-wide micro data on demographics and labour market outcomes. Our results on the effect of the Finnish tax cut on mortality alcohol-related hospitalisations in Sweden are very imprecise. However, we find that workplace absenteeism increased by 5% for males and by 13% for females near the Finnish border as a result of the tax cut.

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Section: Previous Literaturementioning

confidence: 99%

Cross-border health and productivity effects of alcohol policies

Johansson¹,

Pekkarinen²,

Verho³

2014

Journal of Health Economics

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“…A number of innovative techniques to generate such estimates, used by independent researchers and governments, have recently appeared in the literature. In Chicago and New Zealand, researchers collected discarded cigarette packs and then identified those on which the appropriate tax was not collected (Merriman, 2010;Wilson, Thomson, Edwards, & Peace, 2009). In Italy, Gallus Tramacere, Zuccaro, Colombo, & La Vecchia (2009) used a survey instrument while a "gap analysis" has been used in South Africa and the United Kingdom (Blecher, 2010;HM Revenue and Customs, 2007).…”

Section: Illicit Trade Issuesmentioning

confidence: 99%

Price and Tax Measures and Illicit Trade in the Framework Convention on Tobacco Control: What We Know and What Research Is Required

Walbeek

Blecher

Gilmore

et al. 2012

Nicotine & Tobacco Research

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introduction: Article 6 of the Framework Convention on Tobacco Control commits Parties to use tax and price policies to reduce tobacco use, whereas Article 15 commits Parties to implement measures to eliminate the illicit trade in tobacco products. This paper identifies research gaps/needs, especially in low-and middle-income countries, which, if adequately addressed, would help in implementing Articles 6 and 15.Methods: Based on a recent comprehensive review on the impact of tax and price on tobacco consumption and a summary of reviews and narratives about the illicit tobacco market, research gaps are identified.Results: Countries have highly diverse research needs, depending on the stage of the tobacco epidemic, previous research and data availability, and making a ranking of research needs infeasible. Broad issues for further research are the following: (1) monitoring tobacco consumption, prices, and taxes, (2) assessing the effectiveness of the tax structure in generating revenue and reducing tobacco use, (3) strengthening the tax administration system in order to reduce tax evasion and tax avoidance, (4) improving our understanding of the political economy of tobacco tax policy, and (5) employing a multidisciplinary approach to assessing the magnitude of illicit tobacco trade. Conclusions:At a technical level, the case for increasing excise taxes to improve public health and increase government revenue is easily made, but the political and policy environment is often not supportive. In order to effectively impact policy, the required approach would typically make use of rigorous economic techniques, and be cognizant of the political economy of raising excise taxes. inTRoduCTionThe World Health Organization's Framework Convention on Tobacco Control (FCTC) sets out a number of measures that aim to reduce the demand for (Articles 6-14) and supply of tobacco (Articles 15-17). The focus of this paper is on Article 6, and to a lesser extent on Article 15. Article 6 (Box 1) commits the Parties to implement tax policies (and where appropriate, price policies) that aim to reduce tobacco consumption, while Article 15 (Box 2) aims to eliminate the illicit trade in tobacco products.As a framework treaty, the FCTC does not provide specific detail on best practices and how Parties should implement the treaty but rather leaves it to a series of Protocols and Guidelines which are negotiated at a later stage. Guidelines provide recommendations on the implementation and/or interpretation of treaty obligations while protocols are legally binding and introduce new obligations. A Protocol on the illicit trade in tobacco products has been negotiated and a working group to develop Guidelines for Article 6 has been established. Both the Protocol and the Guidelines are on the agenda for adoption at the Conference of the Parties in November 2012.Article 6 encourages the Parties to increase the tax on cigarettes, which would increase their retail prices, make cigarettes less affordable and thus discourage consumption. Since ...

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“…Recent literature has provided some interesting and innovative techniques to undertake this. Merriman [3] and Wilson et al [4] have collected discarded cigarette packs in Chicago and New Zealand, respectively. Gallus et al [5] use a survey to estimate the scale of illicit trade in Italy, while HM Revenue and Customs [6] and Blecher [2] use a 'gap analysis' to estimate the scale of illicit trade over time in the United Kingdom and South Africa, respectively.…”

mentioning

confidence: 99%

Commentary on Joossens et al. (2010): Eliminating the global illicit cigarette trade – what do we really know?

Blecher

2010

Addiction

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The Micro-Geography of Tax Avoidance: Evidence from Littered Cigarette Packs in Chicago

Cited by 120 publications

References 8 publications

Cross-border health and productivity effects of alcohol policies

Cross-border health and productivity effects of alcohol policies

Price and Tax Measures and Illicit Trade in the Framework Convention on Tobacco Control: What We Know and What Research Is Required

Commentary on Joossens et al. (2010): Eliminating the global illicit cigarette trade – what do we really know?

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