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Litigation and the Political Clout of the Tobacco Companies: Cigarette Taxes, Prices, and the Master Settlement Agreement

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Author Info
Frank A. Sloan (Center for Health Policy, Law & Management, Duke University)
Justin G. Trogdon (School of Economics, University of Adelaide)

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Abstract

The goal of our empirical analysis is to assess whether the changes in cigarette excise taxes and cigarette prices can be attributed to litigation brought by the states and the resulting settlements, holding other factors constant. Using pre-post as well as state excise taxes on beer as controls, the evidence provides support for the view that litigation changes the political equilibrium: state cigarette excise taxes were approximately $0.10 higher in the post-MSA period. For tobacco prices, the increases are attributable to the method the settlement used to structure payments as well as the market structure of the cigarette industry.

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Publisher Info
Paper provided by EconWPA in its series HEW with number 0411002.

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Length: 42 pages
Date of creation: 03 Nov 2004
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Handle: RePEc:wpa:wuwphe:0411002

Note: Type of Document - pdf; pages: 42
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Related research
Keywords: Master Settlement Agreement; excise tax; tobacco;

Other versions of this item:

Find related papers by JEL classification:
I12 - Health, Education, and Welfare - - Health - - - Health Production
K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability
L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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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.:
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    Other versions:
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  14. Anderson, Simon P. & de Palma, Andre & Kreider, Brent, 2001. "Tax incidence in differentiated product oligopoly," Journal of Public Economics, Elsevier, vol. 81(2), pages 173-192, August. [Downloadable!] (restricted)
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  15. Kahn, Matthew E & Matsusaka, John G, 1997. "Demand for Environmental Goods: Evidence from Voting Patterns on California Initiatives," Journal of Law & Economics, University of Chicago Press, vol. 40(1), pages 137-73, April.
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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.)

  1. Philip J. Cook & Jan Ostermann & Frank A. Sloan, 2005. "Are Alcohol Excise Taxes Good For Us? Short and Long-Term Effects on Mortality Rates," NBER Working Papers 11138, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Philip J. Cook & Jan Ostermann & Frank A. Sloan, 2005. "The Net Effect of an Alcohol Tax Increase on Death Rates in Middle Age," American Economic Review, American Economic Association, vol. 95(2), pages 278-281, May. [Downloadable!]
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