Abstract
This paper uses 336 state tax changes across the U.S. spanning 42 years (1956–1997) to provide an updated look at the quasi-experimental price elasticities of cigarette demand. It also studies the sensitivity of these elasticity estimates to changes in the cigarette market over time as well as their sensitivity to border-effect purchases. Besides replicating earlier findings, the results show a downward trend in these elasticities over time and sensitivity to border effect purchases. Policy implications are discussed.
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We dedicate this article to the memory of Julian Simon.
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Baltagi, B.H., Goel, R.K. State tax changes and quasi-experimental price elasticities of U.S. cigarette demand: An update. J Econ Finan 28, 422–429 (2004). https://doi.org/10.1007/BF02751744
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DOI: https://doi.org/10.1007/BF02751744