Tobacco Regulation through Litigation: The Master Settlement Agreement
AbstractThe 1998 Master Settlement Agreement resolved the unprecedented litigation in which the states sought to recoup the cigarette-related Medicaid costs. The litigation was settled through a combination of negotiated regulatory requirements and financial payments of about $250 billion over 25 years. Settlement payments received by states are strongly related to smoking-related medical costs but are also related to political factors. The payments largely took the form of an excise tax equivalent, raising potential antitrust concerns. The regulatory restrictions imposed by the agreement also raised antitrust concerns. However, there has been no evident shift in industry concentration. The increase in advertising and marketing expenses has largely taken the form of price discounts. The settlement sidestepped the usual procedures pertaining to the imposition of taxes and the promulgation of new regulations.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15422.
Date of creation: Oct 2009
Date of revision:
Publication status: published as W. Kip Viscusi, Joni Hersch. "Tobacco Regulation through Litigation: The Master Settlement Agreement," in Daniel P. Kessler, editor, "Regulation vs. Litigation: Perspectives from Economics and Law" University of Chicago Press (2011)
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- W. Kip Viscusi & Joni Hersch, 2010. "Tobacco Regulation through Litigation: The Master Settlement Agreement," NBER Chapters, in: Regulation vs. Litigation: Perspectives from Economics and Law, pages 71-101 National Bureau of Economic Research, Inc.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- K0 - Law and Economics - - General
- K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-10-24 (All new papers)
- NEP-HEA-2009-10-24 (Health Economics)
- NEP-PBE-2009-10-24 (Public Economics)
- NEP-REG-2009-10-24 (Regulation)
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