Taxes, Cigarette Consumption, and Smoking Intensity: Comment
This paper re-examines Adda and Cornaglia's (2006) evidence on the compensatory behavior of smokers who, in face of higher taxes, are found to reduce their consumption of cigarettes while maintaining their cotinine--a biomarker for nicotine--levels constant. This comment examines the robustness of the empirical findings in Adda and Cornaglia (2006) using: appropriate clustered standard errors, a larger sample from the same years and survey as the data in Adda and Cornaglia (2006), cigarette-prices instead of and in addition to cigarette-taxes, and sampling weights. The empirical findings of Adda and Cornaglia (2006) are not robust. Further, little systematic evidence of compensatory behavior is found among subsamples of smokers.
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Volume (Year): 102 (2012)
Issue (Month): 4 (June)
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