The Micro-geography of Tax Avoidance: Evidence from Littered Cigarette Packs in Chicago
AbstractThe large tax differentials between Chicago and neighboring jurisdictions provide an incentive for cigarette tax avoidance. Data from a random sample of cigarette packs littered in Chicago reveals a startling degree of tax avoidance: three-quarters did not display a Chicago tax stamp. Also, the $2.68 difference between the tax in Chicago and surrounding counties decreases the probability of a local stamp by almost 60 percent, and a one mile increase in distance to the lower-tax state border increases the probability a pack of a local stamp by about one percent. These results are consistent with the predictions of economic theory. (JEL H25, H26, H71)
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Journal: Economic Policy.
Volume (Year): 2 (2010)
Issue (Month): 2 (May)
Find related papers by JEL classification:
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- James Alm & Mikhail I. Melnik, 2012. "Does Online Cross-border Shopping Affect State Use Tax Liabilities?," Working Papers 1206, Tulane University, Department of Economics.
- Brian Knight, 2013.
"State Gun Policy and Cross-State Externalities: Evidence from Crime Gun Tracing,"
American Economic Journal: Economic Policy,
American Economic Association, vol. 5(4), pages 200-229, November.
- Brian G. Knight, 2011. "State Gun Policy and Cross-State Externalities: Evidence from Crime Gun Tracing," NBER Working Papers 17469, National Bureau of Economic Research, Inc.
- Johansson, Per & Pekkarinen, Tuomas & Verho, Jouko, 2012.
"Cross-Border Health and Productivity Effects of Alcohol Policies,"
IZA Discussion Papers
6389, Institute for the Study of Labor (IZA).
- Johansson, Per & Pekkarinen, Tuomas & Verho, Jouko, 2012. "Cross-border health and productivity effects of alcohol policies," Working Paper Series 2012:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- David Agrawal, 2012. "Games within borders: are geographically differentiated taxes optimal?," International Tax and Public Finance, Springer, vol. 19(4), pages 574-597, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.