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The European Journal of Health Economics

, Volume 17, Issue 9, pp 1073–1089 | Cite as

Does smoke cross the border? Cigarette tax avoidance in France

  • Christian Ben LakhdarEmail author
  • Nicolas Gérard Vaillant
  • François-Charles Wolff
Original Paper

Abstract

This paper examines the impact on cigarette sales of the successive increases in cigarette prices in France from 2002 to 2004. Since the price differential between France and neighboring countries increased over the period in question, cross-border purchases became more financially attractive for smokers living near borders. Results from difference-in-differences estimates indicate that the decrease in cigarette sales observed in French border departments was around 20 % higher from 2004 to 2007 compared to non-border departments. The loss of fiscal revenue due to cross-border shopping since the tax increase amounts to 2 billion euros over the period 2002–2007. Our findings highlight the need for improved coordination of policies aimed at reducing tobacco consumption across European Union countries.

Keywords

Cigarette sales Cross-border shopping Difference-in-differences estimation 

JEL Classification

I18 H26 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  • Christian Ben Lakhdar
    • 1
    Email author
  • Nicolas Gérard Vaillant
    • 2
  • François-Charles Wolff
    • 3
    • 4
  1. 1.LEM (UMR 9221 CNRS)Université de LilleLilleFrance
  2. 2.LEM (UMR 9221 CNRS)Université Catholique de Lille (Laboratoire d’Anthropologie Expérimentale and ISTC Strategies and Communication)Lille CedexFrance
  3. 3.LEMNA, Université de NantesNantes CedexFrance
  4. 4.Institut national d’études démographiques (INED)ParisFrance

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