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http://hdl.handle.net/10419/33513
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| Title: | | Taxes, cigarette consumption and smoking intensity  |
| Authors: | | Adda, Jérôme Cornaglia, Francesca |
| Issue Date: | | 2005 |
| Series/Report no.: | | IZA Discussion Papers 1849 |
| Abstract: | | This paper analyses the compensatory behavior of smokers. Exploiting data on cotinine concentration a metabolite of nicotine measured in a large population of smokers over time, we show that smokers compensate tax hikes by extracting more nicotine per cigarette. Our study makes two important contributions. First, as smoking more intensively a given cigarette is detrimental to health, our results question the usefulness of tax increases. Second, we develop a model of rational addiction where agents can also adjust their intensity of smoking and we show that the previous empirical results suffer from severe estimation biases. |
| Subjects: | | taxes smoking cigarettes addiction |
| JEL: | | I1 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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