Cigarette Taxation and the Social Consequences of Smoking
AbstractThis paper assesses the appropriate cigarette tax needed to address potential market failures. There is no evidence of inadequate risk decisions by smokers regarding their own welfare. Detailed calculations of the financial externalities of smoking indicate that the financial savings from premature mortality in terms of lower nursing home costs and retirement pensions exceed the higher medical care and life insurance costs generated. The costs of environmental tobacco smoke are highly uncertain, but of potentially substantial magnitude. Even with recognition of these costs, current cigarette taxes exceed the magnitude of the estimated net externalities.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4891.
Date of creation: Oct 1994
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Publication status: published as W. Kip Viscusi. "Cigarette Taxation and the Social Consequences of Smoking," in James M. Poterba, editor, "Tax Policy and the Economy, Volume 9" MIT Press (1995)
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Other versions of this item:
- W. Kip Viscusi, 1995. "Cigarette Taxation and the Social Consequences of Smoking," NBER Chapters, in: Tax Policy and the Economy, Volume 9, pages 51-102 National Bureau of Economic Research, Inc.
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