Kenneth W. Clements () (Department of Economics, The University of Western Australia) Yihui Lan () (Department of Economics, The University of Western Australia) Xueyan Zhao (Department of Econometrics and Business Statistics, Monash University)
Additional information is available for the following
registered author(s):
This paper introduces a simulation procedure in the context of a demand system for vice -- marijuana, tobacco and alcohol -- to formally account for the inherent uncertainty in marijuanarelated data and parameters. This entails using existing econometric estimates pertaining to the consumption of alcohol and tobacco, and the much more limited information on marijuana. As an illustrative application of the framework, we simulate the impact on the consumption of vice of a reduction in the price of marijuana; changes in pre-existing taxes on tobacco and alcohol; legalisation of marijuana, which is then subject to taxation; and a tax tradeoff involving the introduction of a revenue-neutral tax on marijuana that is offset by reduced alcohol taxation. The revenue-maximising tax rate of about 50 percent is estimated to yield additional revenue of about 15 percent of the pre-existing proceeds from vice taxation. The role of uncertainty surrounding preference interactions within vice, as well as the uncertainties regarding marijuana data, is highlighted by providing the whole distribution of each endogenous variable.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by The University of Western Australia, Department of Economics in its series Economics Discussion / Working Papers with number
05-30.
For technical questions regarding this item, or to correct its listing, contact: (Callum Jones) The email address of this maintainer does not seem to be valid anymore. Please ask Callum Jones to update the entry or send us the correct address..
Find related papers by JEL classification: H2 - Public Economics - - Taxation, Subsidies, and Revenue K0 - Law and Economics - - General I0 - Health, Education, and Welfare - - General D5 - Microeconomics - - General Equilibrium and Disequilibrium C6 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Frank J. Chaloupka & Kenneth E. Warner, 1999.
"The Economics of Smoking,"
NBER Working Papers
7047, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
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.
[Downloadable!] (restricted)
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)