Determinants of Tobacco Tax Noncompliance: Evidence Among German Smokers

Maike Roth and Friedrich Schneider

No 12690, CESifo Working Paper Series from CESifo

Abstract: Using a conducted survey for Germany allows us to evaluate the access to illicit tobacco products and the propensity to engage in illicit purchasing behavior. By separating realized opportunities from stated openness toward future illicit purchases, the analysis provides new insights into the behavioral foundations of illicit tobacco markets. Understanding these mechanisms is particularly relevant in the current policy context. If illicit demand responds not only to prices but also to attitudes toward taxation and regulation, further tax increases may have heterogeneous effects across population groups. Overall, the findings suggest that effective tobacco tax policy should not be based solely on price incentives. Where regulation is perceived as a restriction of freedom, the risk of openness in the illicit market may increase.

Keywords: tobacco tax noncompliance; conducted survey; illicit tobacco products and markets; price incentives; regulation (search for similar items in EconPapers)
JEL-codes: H26 K42 M38 O17 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12690

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