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Using Littered Pack Data to Estimate Cigarette Tax Avoidance in Nyc

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  • Howard Chernick
  • David Merriman

Abstract

Using data on tax stamps obtained from random samples of littered packs of cigarettes, collected once before and three times after a June 2008 New York State tax increase, we find that baseline New York City tax avoidance is high relative to national estimates, and that rates of avoidance are particularly high in neighborhoods with high levels of poverty and in relatively close proximity to a Native American reservation. The share of littered packs with no tax stamp increased from 15 to 24 percent after the tax increase. We find that in addition to the large increase in avoidance, cigarette consumption declined.

Suggested Citation

  • Howard Chernick & David Merriman, 2013. "Using Littered Pack Data to Estimate Cigarette Tax Avoidance in Nyc," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(3), pages 635-668, June.
    • Handle: RePEc:ntj:journl:v:66:y:2013:i:3:p:635-668
    DOI: 10.17310/ntj.2013.3.05
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    References listed on IDEAS

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    7. Gruber, Jonathan & Sen, Anindya & Stabile, Mark, 2003. "Estimating price elasticities when there is smuggling: the sensitivity of smoking to price in Canada," Journal of Health Economics, Elsevier, vol. 22(5), pages 821-842, September.
    8. Stehr, Mark, 2005. "Cigarette tax avoidance and evasion," Journal of Health Economics, Elsevier, vol. 24(2), pages 277-297, March.
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    Cited by:

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    3. Philip DeCicca & Donald Kenkel & Feng Liu, 2015. "Reservation Prices: An Economic Analysis of Cigarette Purchases on Indian Reservations," National Tax Journal, National Tax Association;National Tax Journal, vol. 68(1), pages 93-118, March.
    4. Huynh, Dat & Sokolova, Anna & Tosun, Mehmet S., 2022. "Tax Elasticity of Border Sales: A Meta-Analysis," IZA Discussion Papers 15525, Institute of Labor Economics (IZA).
    5. Hansen, Benjamin & Miller, Keaton & Weber, Caroline, 2020. "Federalism, partial prohibition, and cross-border sales: Evidence from recreational marijuana," Journal of Public Economics, Elsevier, vol. 187(C).
    6. James Alm, 2019. "What Motivates Tax Compliance?," Journal of Economic Surveys, Wiley Blackwell, vol. 33(2), pages 353-388, April.
    7. S. M. Abdullah & Rumana Huque & Linda Bauld & Hana Ross & Anna Gilmore & Rijo M. John & Fiona Dobbie & Kamran Siddiqi, 2020. "Estimating the Magnitude of Illicit Cigarette Trade in Bangladesh: Protocol for a Mixed-Methods Study," IJERPH, MDPI, vol. 17(13), pages 1-14, July.
    8. Emilian Dobrescu, 2016. "LINS Curve in Romanian Economy," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 18(41), pages 136-136, February.
    9. Shu Wang & David Merriman & Frank Chaloupka, 2019. "Relative Tax Rates, Proximity, and Cigarette Tax Noncompliance: Evidence from a National Sample of Littered Cigarette Packs," Public Finance Review, , vol. 47(2), pages 276-311, March.
    10. Gallego, Juan M. & Llorente, Blanca & Maldonado, Norman & Otálvaro-Ramírez, Susana & Rodríguez-Lesmes, Paul, 2020. "Tobacco taxes and illicit cigarette trade in Colombia," Economics & Human Biology, Elsevier, vol. 39(C).

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