Taxes, Cigarette Consumption, and Smoking Intensity: Reply
Jérôme Adda, Francesca Cornaglia
American Economic Review · 2013 · Volume 103 · Issue 7
Abstract
This paper shows that smoking intensity, i.e. the amount of nicotine extracted per cigarette smoked, responds to changes in excise taxes and tobacco prices. We exploit NHANES data covering the period 1988 to 2006 across many US states. Moreover, using panel data from the Coronary Artery Risk Development in Young Adults (CARDIA) study, we provide new evidence on the importance of cotinine measures in explaining long-run smoking behavior. We show the importance of smoking intensity as a long-run determinant of smoking cessation. We also investigate the sensitivity of smoking cessation to changes in excise taxes and their interaction with smoking intensity.
Keywords
Business Taxes and Subsidies including sales and value-added (VAT), Fiscal Policies and Behavior of Economic Agents: Firm, Health Production, Production, Pricing, and Market Structure, Size Distribution of Firms, Food, Beverages, Cosmetics, Tobacco, Wine and Spirits
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