Cigarette smuggling mitigates the public health benefits of cigarette taxes
AbstractMerriman (2002) argues that cigarette smuggling does not reduce the health benefits of cigarette taxation, because, in addition to the purchase price of smuggled cigarettes, those purchasing smuggled cigarettes have to pay a higher inconvenience price for their cigarettes, so that smuggled cigarettes no more than replace legal cigarettes. Here, it is argued that Merriman is incorrect, that while smuggled cigarettes have the same full cost as legal cigarettes at the margin, they have a lower inframarginal full price, which has the effect of increasing smoking behaviour.
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Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal Applied Economics Letters.
Volume (Year): 12 (2005)
Issue (Month): 12 ()
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Web page: http://www.tandf.co.uk/journals/routledge/13504851.html
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- Jason M. Fletcher, 2010. "Social interactions and smoking: evidence using multiple student cohorts, instrumental variables, and school fixed effects," Health Economics, John Wiley & Sons, Ltd., vol. 19(4), pages 466-484.
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