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Quasi-Experimental Price Elasticities of Cigarette Demand and the Bootlegging Effect

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  • Badi H. Baltagi
  • Rajeev K. Goel

Abstract

This paper updates the Lyon and Simon quasi-experimental price elasticities of cigarette demand and studies their sensitivity to changes in the cigarette market over time as well as their sensitivity to the effects of bootlegging. The results indicate a downward trend in these elasticities over time and an upward bias for states where bootlegging exists. However, once the comparison group is modified to include bootlegging-free states only, this difference over time and across groups becomes statistically insignificant.

Suggested Citation

  • Badi H. Baltagi & Rajeev K. Goel, 1987. "Quasi-Experimental Price Elasticities of Cigarette Demand and the Bootlegging Effect," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(4), pages 750-754.
  • Handle: RePEc:oup:ajagec:v:69:y:1987:i:4:p:750-754.
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    File URL: http://hdl.handle.net/10.2307/1242184
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    Cited by:

    1. repec:eee:pubeco:v:150:y:2017:i:c:p:53-74 is not listed on IDEAS
    2. Thursby, Jerry G. & Thursby, Marie C., 2000. "Interstate Cigarette Bootlegging: Extent, Revenue Losses, and Effects of Federal Intervention," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(1), pages 59-78, March.
    3. Thursby, Jerry G. & Thursby, Marie C., 2000. "Interstate Cigarette Bootlegging: Extent, Revenue Losses, and Effects of Federal Intervention," National Tax Journal, National Tax Association, vol. 53(n. 1), pages 59-78, March.
    4. Benjamin, Daniel K & Dougan, William R, 1997. "Efficient Excise Taxation: The Evidence from Cigarettes," Journal of Law and Economics, University of Chicago Press, vol. 40(1), pages 113-136, April.
    5. Celidoni, Martina & Pieroni, Luca & Salmasi, Luca, 2014. "Side-effects of anti-smoking policies on health behaviors. Evidence from the US," MPRA Paper 58312, University Library of Munich, Germany.
    6. Marie Thursby & Richard Jensen & Jerry Thursby, 1991. "Smuggling, Camouflaging, and Market Structure," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 789-814.
    7. Escañuela Romana, Ignacio, 2018. "La elasticidad precio de la demanda de transporte aéreo de pasajeros en los Estados Unidos
      [The price elasticity of demand for air travel in the United States]
      ," MPRA Paper 83572, University Library of Munich, Germany.
    8. Marie C. Thursby & Jerry G. Thursby, 1994. "Interstate Cigarette Bootlegging: Extent, Revenue Losses, and Effects of Government Intervention," NBER Working Papers 4763, National Bureau of Economic Research, Inc.
    9. Stehr, Mark, 2005. "Cigarette tax avoidance and evasion," Journal of Health Economics, Elsevier, vol. 24(2), pages 277-297, March.
    10. Badi Baltagi & Rajeev Goel, 2004. "State tax changes and quasi-experimental price elasticities of U.S. cigarette demand: An update," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 28(3), pages 422-429, September.

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