Policy Watch: Alcohol and Cigarette Taxes

Michael Grossman

Journal of Economic Perspectives, 1993, vol. 7, issue 4, 211-222

Abstract: Increased excise taxes on cigarettes and alcohol have been suggested as a means to finance (at least partially) the Clinton administration's proposed program of health care reform. We consider the revenue potential of cigarette and alcohol tax hikes and explore the effects on consumption and related outcomes. We present estimates of the social costs and implied optimal tax rates on cigarettes and alcohol. The bulk of the evidence presented here does support higher taxes on cigarettes and alcohol.

JEL-codes: H25 L66 (search for similar items in EconPapers)
Date: 1993
Note: DOI: 10.1257/jep.7.4.211
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Citations: View citations in EconPapers (47)

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