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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 & 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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Paper provided by EconWPA in its series HEW with number 0411002.

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Length: 42 pages
Date of creation: 03 Nov 2004
Date of revision:
Handle: RePEc:wpa:wuwphe:0411002
Note: Type of Document - pdf; pages: 42
Contact details of provider: Web page: http://econwpa.repec.org

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