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It's Not the Money: Why German Smokers May Turn to Illicit Markets

Author

Listed:
  • Maike Roth

    (Johannes Gutenberg University, Germany)

  • Prof. Dr. Friedrich Schneider

    (Johannes Kepler University, Germany)

Abstract

Using a survey for Germany, we evaluate access to illicit tobacco products and the propensity to engage in illicit purchasing. By separating realized opportunities from stated openness toward future illicit purchases, the analysis provides insight into the behavioral foundations of illicit tobacco markets. This is relevant for current policy. If illicit demand responds not only to prices but also to attitudes toward taxation and regulation, tax increases may have heterogeneous effects across groups. Overall, the findings suggest that effective tobacco tax policy should not rely solely on price incentives, as perceived restrictions of freedom may increase openness to illicit markets.

Suggested Citation

  • Maike Roth & Prof. Dr. Friedrich Schneider, 2026. "It's Not the Money: Why German Smokers May Turn to Illicit Markets," Working Papers 2606, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    • Handle: RePEc:jgu:wpaper:2606
    as

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    File URL: https://download.uni-mainz.de/RePEc/pdf/Discussion_Paper_2606.pdf
    File Function: first version, 2026
    Download Restriction: no
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    More about this item

    Keywords

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    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • M38 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Government Policy and Regulation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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