Who Pays Cigarette Taxes? The Impact of Consumer Price Search
AbstractWe conduct an empirical study of the impact of consumer price-search on the shifting of cigarette excise taxes to consumer prices. We use novel data on the prices smokers report actually paying for cigarettes. We document substantial price dispersion. We find that cigarette taxes are shifted at lower rates to the prices paid by consumers who undertake more price search – carton buyers, and especially, smokers who buy cartons of cigarettes in a state other than their state of residence. We also find suggestive evidence that taxes are shifted at slightly higher rates to the prices paid by non-daily smokers, less addicted smokers, and smokers of light cigarettes.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15942.
Date of creation: Apr 2010
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Other versions of this item:
- Philip DeCicca & Donald Kenkel & Feng Liu, 2013. "Who Pays Cigarette Taxes? The Impact of Consumer Price Search," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 516-529, May.
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-08 (All new papers)
- NEP-MKT-2010-05-08 (Marketing)
- NEP-PUB-2010-05-08 (Public Finance)
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- Mario Jametti & Agustin Redonda & Anindya Sen, 2013.
"The Power to Pass on Taxes - A Test for Tax Shifting Based on Observables,"
CESifo Working Paper Series
4265, CESifo Group Munich.
- Mario Jametti & Agustin Redonda & Anindya Sen, 2013. "The Power to Pass on Taxes - A Test for Tax Shifting based on Observables," Quaderni della facoltÃ di Scienze economiche dell'UniversitÃ di Lugano 1301, USI Università della Svizzera italiana.
- Hansen, Benjamin & Sabia, Joseph J. & Rees, Daniel I., 2011. "Cigarette Taxes and the Social Market," IZA Discussion Papers 5580, Institute for the Study of Labor (IZA).
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