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

  • Frank A. Sloan

    (Center for Health Policy, Law and Management, Duke University)

  • Justin G. Trogdon

    (School of Economics, University of Adelaide)

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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File URL: http://www.economics.adelaide.edu.au/research/papers/doc/wp2004-04.pdf
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Paper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 2004-04.

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Length: 41 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:adl:wpaper:2004-04
Contact details of provider: Postal: Adelaide SA 5005
Phone: (618) 8303 5540
Web page: http://www.economics.adelaide.edu.au/

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