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The impact of the master settlement agreement on cigarette consumption

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Author Info

  • Frank A. Sloan

    (Duke University)

  • Justin G. Trogdon

    (University of Adelaide, Australia)

Abstract

In 1998, 46 states and the four major tobacco companies signed the Master Settlement Agreement (MSA), which stipulated that the tobacco companies pay states $206 billion over 25 years and take steps to reduce youth smoking. The remaining states settled separately. We sought to determine the effect of the settlements on demand for cigarettes. Using a nationwide sample from 1990 to 2002, we estimated a model of the decision to smoke cigarettes. The settlements affected smoking primarily through price increases for cigarettes, although there was evidence that other policy instruments influenced smoking rates for younger smokers. By 2002, the settlements had reduced overall smoking rates by 13 percent for ages 18 to 20 and older than 65 and 5 percent for ages 21 to 64. © 2004 by the Association for Public Policy Analysis and Management.

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File URL: http://hdl.handle.net/10.1002/pam.20050
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

Volume (Year): 23 (2004)
Issue (Month): 4 ()
Pages: 843-855

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Handle: RePEc:wly:jpamgt:v:23:y:2004:i:4:p:843-855

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Web page: http://www3.interscience.wiley.com/journal/34787/home

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References

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  1. Czart, Christina PhD & Pacula, Rosalie Liccardo PhD & Chaloupka, Frank J. PhD & Weschsler, Henry PhD, 2001. "The Impact of Prices and Control Policies on Cigarette Smoking among College Students," University of California at San Francisco, Center for Tobacco Control Research and Education qt7j06g804, Center for Tobacco Control Research and Education, UC San Francisco.
  2. Chaloupka, Frank J. & Warner, Kenneth E., 2000. "The economics of smoking," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 29, pages 1539-1627 Elsevier.
  3. Frank A. Sloan & Justin G. Trogdon, 2004. "Litigation and the Political Clout of the Tobacco Companies: Cigarette Taxes, Prices, and the Master Settlement Agreement," HEW 0411002, EconWPA.
  4. Gary S. Becker & Kevin M. Murphy, 1986. "A Theory of Rational Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 41, Chicago - Center for Study of Economy and State.
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Citations

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Cited by:
  1. Carpenter, Christopher & Cook, Philip J., 2008. "Cigarette taxes and youth smoking: New evidence from national, state, and local Youth Risk Behavior Surveys," Journal of Health Economics, Elsevier, vol. 27(2), pages 287-299, March.
  2. W. Kip Viscusi & Joni Hersch, 2009. "Tobacco Regulation through Litigation: The Master Settlement Agreement," NBER Working Papers 15422, National Bureau of Economic Research, Inc.
  3. Levy, Douglas E. & Meara, Ellen, 2006. "The effect of the 1998 Master Settlement Agreement on prenatal smoking," Journal of Health Economics, Elsevier, vol. 25(2), pages 276-294, March.
  4. 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.
  5. David Simon, 2013. "Does Early Life Exposure to Cigarette Smoke Permanently Harm Childhood Health? Evidence from Cigarette Tax Hikes," Working papers 2013-21, University of Connecticut, Department of Economics.
  6. Christopher Carpenter & Philip J. Cook, 2007. "Cigarette Taxes and Youth Smoking: New Evidence from National, State, & Local Youth Risk Behavior Surveys," NBER Working Papers 13046, National Bureau of Economic Research, Inc.
  7. Frank A. Sloan & Justin G. Trogdon, 2004. "Litigation and the Political Clout of the Tobacco Companies: Cigarette Taxes, Prices, and the Master Settlement Agreement," HEW 0411002, EconWPA.
  8. Sloan, Frank A. & Trogdon, Justin G. & Mathews, Carrie A., 2005. "Litigation and the value of tobacco companies," Journal of Health Economics, Elsevier, vol. 24(3), pages 427-447, May.
  9. Ian A. MacKenzie & Markus Ohndorf, 2014. "Coasean Bargaining in the Presence of Pigouvian Taxation: Revisiting the Buchanan-Stubblebine-Turvey Theorem," Discussion Papers Series 515, School of Economics, University of Queensland, Australia.
  10. Goel, Rajeev K. & Nelson, Michael A., 2007. "The Master Settlement Agreement and cigarette tax policy," Journal of Policy Modeling, Elsevier, vol. 29(3), pages 431-438.
  11. Goel, Rajeev K., 2013. "Where to snuff the puff? Relative effectiveness of U.S. smoking control policies," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 97-102.

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