Date of Award
This paper seeks to examine the effectiveness of state excise taxes on packs of cigarettes as a way to inhibit their consumption. Through literature review, demand elasticity analysis, and by use of multivariable regression, the efficiency and effectiveness of higher excise taxes as a public health measure are analyzed. The paper is organized as follows: the next section briefly traces the history in the U.S. of cigarette consumption, associated health issues and its taxation. The third and fourth sections of the paper discuss the previous research on the efficiency and incidence effects of cigarette taxation, and the data used in the empirical analysis. The final sections of the paper discuss the empirical model of the determinants of cigarette smoking, the results of the estimation, and conclude with a public policy recommendation on tax rates and public health expenditures based on regression results. Consumption rates and excise tax rates will be analyzed on a state- by-state basis.
Benson, Mary, "Cigarette Taxes and Consumption: An Economic and Policy Analysis" (2013). Senior Honors Projects. 19.