It's Not the Money: Why German Smokers May Turn to Illicit Markets

Maike Roth () and Friedrich Schneider ()
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Maike Roth: Johannes Gutenberg University, Germany
Friedrich Schneider: Johannes Kepler University, Germany

No 2606, Working Papers from Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz

Abstract: Using a survey for Germany, we evaluate access to illicit tobacco products and the propensity to engage in illicit purchasing. By separating realized opportunities from stated openness toward future illicit purchases, the analysis provides insight into the behavioral foundations of illicit tobacco markets. This is relevant for current policy. If illicit demand responds not only to prices but also to attitudes toward taxation and regulation, tax increases may have heterogeneous effects across groups. Overall, the findings suggest that effective tobacco tax policy should not rely solely on price incentives, as perceived restrictions of freedom may increase openness to illicit markets.

Keywords: Tobacco tax noncompliance; conducted survey; illicit tobacco products and markets; price incentive; regulation (search for similar items in EconPapers)
JEL-codes: H26 K42 M38 O17 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2026-06-19
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Persistent link: https://EconPapers.repec.org/RePEc:jgu:wpaper:2606

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