IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/49201.html
   My bibliography  Save this paper

A Preliminary Contemporary Panel Data Analysis of the Consumption Impact of Cigarette Taxation

Author

Listed:
  • Cebula, Richard

Abstract

The adverse effects from cigarette smoking account for an estimated 400,000 deaths annually in the U.S. Given this circumstance, the present study has two objectives. First, using a panel data-set for a very recent time frame, it seeks to investigate the impact of federal plus state cigarette excise taxes (along with a host of other factors) on the aggregate consumption of cigarettes. The study adopts a five-year state-level panel data-set spanning the period 2002 through 2006. Consistent with certain previous studies, the estimates in this study find that the higher the cigarette excise tax, the lower the aggregate volume of cigarettes consumed. The second objective of this study is to formally propose a general form/template for a cigarette excise tax that is tied directly to each cigarette brand's nicotine and tar content.

Suggested Citation

  • Cebula, Richard, 2010. "A Preliminary Contemporary Panel Data Analysis of the Consumption Impact of Cigarette Taxation," MPRA Paper 49201, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:49201
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/49201/1/MPRA_paper_49201.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Diana S. Lien & William N. Evans, 2005. "Estimating the Impact of Large Cigarette Tax Hikes: The Case of Maternal Smoking and Infant Birth Weight," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
    2. Lovenheim, Michael F., 2008. "How Far to the Border?: The Extent and Impact of Cross-Border Casual Cigarette Smuggling," National Tax Journal, National Tax Association;National Tax Journal, vol. 61(1), pages 7-33, March.
    3. Showalter, M.H., 1998. "The effect of cigarette taxes on cigarette consumption," American Journal of Public Health, American Public Health Association, vol. 88(7), pages 1118-1119.
    4. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    5. Xavier Giné & Dean Karlan & Jonathan Zinman, 2010. "Put Your Money Where Your Butt Is: A Commitment Contract for Smoking Cessation," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 213-235, October.
    6. M.C. Farrelly & C.T. Nimsch & A. Hyland & M. Cummings, 2004. "The effects of higher cigarette prices on tar and nicotine consumption in a cohort of adult smokers," Health Economics, John Wiley & Sons, Ltd., vol. 13(1), pages 49-58, January.
    7. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, April.
    8. William N. Evans & Matthew C. Farrelly, 1998. "The Compensating Behavior of Smokers: Taxes, Tar, and Nicotine," RAND Journal of Economics, The RAND Corporation, vol. 29(3), pages 578-595, Autumn.
    9. Chaloupka, Frank J. & Warner, Kenneth E., 2000. "The economics of smoking," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 29, pages 1539-1627, Elsevier.
    10. Martin Forster & Andrew M. Jones, 2001. "The role of tobacco taxes in starting and quitting smoking: Duration analysis of British data," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 164(3), pages 517-547.
    11. Anderson, Lisa R. & Mellor, Jennifer M., 2008. "Predicting health behaviors with an experimental measure of risk preference," Journal of Health Economics, Elsevier, vol. 27(5), pages 1260-1274, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Richard J. Cebula & Fabrizio Rossi, 2015. "Does the Presence of Very Young Children and/or Older Minor-aged Children in the Home Reduce Cigarette Smoking? Panel Data Evidence for the United States," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 9(4), pages 430-441, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richard Cebula & Maggie Foley & Robert Houmes, 2014. "Empirical analysis of the impact of cigarette excise taxes on cigarette consumption: estimates from recent state-level data," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 38(1), pages 164-180, January.
    2. Richard J. Cebula & Fabrizio Rossi, 2015. "Does the Presence of Very Young Children and/or Older Minor-aged Children in the Home Reduce Cigarette Smoking? Panel Data Evidence for the United States," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 9(4), pages 430-441, November.
    3. Johanna Catherine MacLean & Asia Sikora Kessler & Donald S. Kenkel, 2016. "Cigarette Taxes and Older Adult Smoking: Evidence from the Health and Retirement Study," Health Economics, John Wiley & Sons, Ltd., vol. 25(4), pages 424-438, April.
    4. Kevin Callison & Robert Kaestner, 2014. "Do Higher Tobacco Taxes Reduce Adult Smoking? New Evidence Of The Effect Of Recent Cigarette Tax Increases On Adult Smoking," Economic Inquiry, Western Economic Association International, vol. 52(1), pages 155-172, January.
    5. Justin S. White & Hana Ross, 2015. "Smokers' Strategic Responses to Sin Taxes: Evidence from Panel Data in Thailand," Health Economics, John Wiley & Sons, Ltd., vol. 24(2), pages 127-141, February.
    6. Leah K. Lakdawala & David Simon, 2016. "The Intergenerational Consequences of Tobacco Policy," Working papers 2016-27, University of Connecticut, Department of Economics.
    7. Jérôme Adda & Francesca Cornaglia, 2006. "Taxes, Cigarette Consumption, and Smoking Intensity," American Economic Review, American Economic Association, vol. 96(4), pages 1013-1028, September.
    8. David Simon, 2014. "Cigarette Taxation and Pregnancy: Policy Based Estimates of the Price Elasticity of Smoking During Pregnancy," Working papers 2014-22, University of Connecticut, Department of Economics.
    9. Brachet, Tanguy, 2008. "Maternal Smoking, Misclassification, and Infant Health," MPRA Paper 21466, University Library of Munich, Germany.
    10. Kenchington, David G. & Shohfi, Thomas D. & Smith, Jared D. & White, Roger M., 2022. "Do sin tax hikes spur cheating in interpersonal exchange?," Accounting, Organizations and Society, Elsevier, vol. 96(C).
    11. Paolo Liberati & Francesco Crespi & Massimo Paradiso & Simone Tedeschi & Antonio Scialà, 2018. "Smokers Are Different: The Heterogeneity Of Smokers’ Responses To Price Increases," Departmental Working Papers of Economics - University 'Roma Tre' 0237, Department of Economics - University Roma Tre.
    12. Martyn Duffy, 2006. "Tobacco consumption and policy in the United Kingdom," Applied Economics, Taylor & Francis Journals, vol. 38(11), pages 1235-1257.
    13. Rozema, Kyle & Ziebarth, Nicolas R., 2015. "Behavioral Responses to Taxation: Cigarette Taxes and Food Stamp Take-Up," IZA Discussion Papers 8907, Institute of Labor Economics (IZA).
    14. Hong Liu & John A. Rizzo & Qi Sun & Fang Wu, 2015. "How Do Smokers Respond to Cigarette Taxes? Evidence from China's Cigarette Industry," Health Economics, John Wiley & Sons, Ltd., vol. 24(10), pages 1314-1330, October.
    15. Crespi, Francesco & Liberati, Paolo & Paradiso, Massimo & Scialà, Antonio & Tedeschi, Simone, 2021. "Smokers are different: The impact of price increases on smoking reduction and downtrading," Economic Modelling, Elsevier, vol. 97(C), pages 326-334.
    16. Erik Nesson, 2017. "Heterogeneity in Smokers' Responses to Tobacco Control Policies," Health Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 206-225, February.
    17. Nicholas Apergis & Rajeev Goel & James Payne, 2014. "Dynamics of U.S. State Cigarette Consumption: Evidence from Panel Error Correction Modeling," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 42(1), pages 3-20, March.
    18. Erik Nesson, 2012. "The Distributional Effects of Tobacco Control Policies On Adult Smoking Behavior," Working Papers 201207, Ball State University, Department of Economics, revised Jun 2012.
    19. Ramanan Laxminarayan & Anil Deolalikar, 2004. "Tobacco initiation, cessation, and change: evidence from Vietnam," Health Economics, John Wiley & Sons, Ltd., vol. 13(12), pages 1191-1201, December.
    20. Aisha Baisalova, 2022. "Exploring Border Effects: Sensitivity of Cigarette Consumption to Excise Tax," CERGE-EI Working Papers wp726, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

    More about this item

    Keywords

    cigarette smoking per capita; cigarette excise taxation; nicotine and tar-based tax system;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:49201. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.