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Taxes, Cigarette Consumption, and Smoking Intensity: Comment

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  • Jason Abrevaya
  • Laura Puzzello

Abstract

This paper re-examines Adda and Cornaglia's (2006) evidence on the compensatory behavior of smokers who, in face of higher taxes, are found to reduce their consumption of cigarettes while maintaining their cotinine--a biomarker for nicotine--levels constant. This comment examines the robustness of the empirical findings in Adda and Cornaglia (2006) using: appropriate clustered standard errors, a larger sample from the same years and survey as the data in Adda and Cornaglia (2006), cigarette-prices instead of and in addition to cigarette-taxes, and sampling weights. The empirical findings of Adda and Cornaglia (2006) are not robust. Further, little systematic evidence of compensatory behavior is found among subsamples of smokers.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.102.4.1751
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 102 (2012)
Issue (Month): 4 (June)
Pages: 1751-63

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Handle: RePEc:aea:aecrev:v:102:y:2012:i:4:p:1751-63

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  1. Adda, Jérôme & Cornaglia, Francesca, 2005. "Taxes, Cigarette Consumption and Smoking Intensity," IZA Discussion Papers 1849, Institute for the Study of Labor (IZA).
  2. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2007. "Bootstrap-Based Improvements for Inference with Clustered Errors," NBER Technical Working Papers 0344, National Bureau of Economic Research, Inc.
  3. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
  4. Jerome Adda & Francesca Cornaglia, 2005. "The effects of taxes and bans on passive smoking," CeMMAP working papers CWP20/05, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
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Cited by:
  1. Jérôme Adda & Francesca Cornaglia, 2012. "Taxes, cigarette consumption, and smoking intensity: reply," LSE Research Online Documents on Economics 51514, London School of Economics and Political Science, LSE Library.

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