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Taxes, Cigarette Consumption, and Smoking Intensity: Comment

Author

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  • Jason Abrevaya
  • Laura Puzzello

Abstract

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.

Suggested Citation

  • Jason Abrevaya & Laura Puzzello, 2012. "Taxes, Cigarette Consumption, and Smoking Intensity: Comment," American Economic Review, American Economic Association, vol. 102(4), pages 1751-1763, June.
  • Handle: RePEc:aea:aecrev:v:102:y:2012:i:4:p:1751-63
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    References listed on IDEAS

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    1. Jerome Adda & Francesca Cornaglia, 2005. "The effects of taxes and bans on passive smoking," CeMMAP working papers CWP20/05, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    2. Jérôme Adda & Francesca Cornaglia, 2006. "Taxes, Cigarette Consumption, and Smoking Intensity," American Economic Review, American Economic Association, vol. 96(4), pages 1013-1028, September.
    3. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    4. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
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    Cited by:

    1. J?r?me Adda & Francesca Cornaglia, 2013. "Taxes, Cigarette Consumption, and Smoking Intensity: Reply," American Economic Review, American Economic Association, vol. 103(7), pages 3102-3114, December.
    2. repec:eee:hepoli:v:121:y:2017:i:12:p:1288-1295 is not listed on IDEAS
    3. Irvine Ian J. & Nguyen Van Hai, 2014. "Retail Tobacco Display Bans," Forum for Health Economics & Policy, De Gruyter, vol. 17(2), pages 1-27, September.
    4. Odermatt, Reto & Stutzer, Alois, 2015. "Smoking bans, cigarette prices and life satisfaction," Journal of Health Economics, Elsevier, vol. 44(C), pages 176-194.
    5. Chad Cotti & Erik Nesson & Nathan Tefft, 2016. "The Effects of Tobacco Control Policies on Tobacco Products, Tar, and Nicotine Purchases among Adults: Evidence from Household Panel Data," American Economic Journal: Economic Policy, American Economic Association, vol. 8(4), pages 103-123, November.
    6. Ian Irvine, 2015. "Graphic Warning Labels on Cigarette Packaging in Canada: A Targeted Commentary on our Limited State of Knowledge," Working Papers 15002, Concordia University, Department of Economics.

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