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American Economic Review: Vol. 103 No. 7 (December 2013)

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Taxes, Cigarette Consumption, and Smoking Intensity: Reply

Article Citation

Adda, Jérôme, and Francesca Cornaglia. 2013. "Taxes, Cigarette Consumption, and Smoking Intensity: Reply." American Economic Review, 103(7): 3102-14.

DOI: 10.1257/aer.103.7.3102

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.

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Authors

Adda, Jérôme (European U Institute)
Cornaglia, Francesca (Queen Mary, U London)

JEL Classifications

H25: Business Taxes and Subsidies including sales and value-added (VAT)
H32: Fiscal Policies and Behavior of Economic Agents: Firm
I12: Health Production
L11: Production, Pricing, and Market Structure; Size Distribution of Firms
L66: Food; Beverages; Cosmetics; Tobacco; Wine and Spirits


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