Cigarette Taxes and the Master Settlement Agreement
AbstractIn 1998, 46 states and the four major tobacco companies entered into the Master Settlement Agreement (MSA), which stipulated that the tobacco companies pay the states $206 billion over the next several years. Mean cigarette excise taxes rose substantially, nearly 90%, between 1998 and 2002. The goal of our empirical analysis is to assess whether the changes in cigarette excise taxes can be attributed to litigation brought by the states and the resulting settlements. Using a panel data difference-in-difference approach, the evidence suggests that litigation increased excise taxes: state cigarette excise taxes were approximately $0.10 higher post-MSA. (JEL H2, I1) Copyright 2006, Oxford University Press.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 44 (2006)
Issue (Month): 4 (October)
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- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- I1 - Health, Education, and Welfare - - Health
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- Anindya Sen & Tony Wirjanto, 2010. "Estimating the impacts of cigarette taxes on youth smoking participation, initiation, and persistence: empirical evidence from Canada," Health Economics, John Wiley & Sons, Ltd., vol. 19(11), pages 1264-1280.
- W. Kip Viscusi & Joni Hersch, 2010.
"Tobacco Regulation through Litigation: The Master Settlement Agreement,"
in: Regulation vs. Litigation: Perspectives from Economics and Law, pages 71-101
National Bureau of Economic Research, Inc.
- W. Kip Viscusi & Joni Hersch, 2009. "Tobacco Regulation through Litigation: The Master Settlement Agreement," NBER Working Papers 15422, National Bureau of Economic Research, Inc.
- DeCicca, Philip & McLeod, Logan, 2008. "Cigarette taxes and older adult smoking: Evidence from recent large tax increases," Journal of Health Economics, Elsevier, vol. 27(4), pages 918-929, July.
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