Revisiting an important Canadian natural experiment with new methods: an evaluation of the impact of the 1994 tax decrease on smoking

Philip Merrigan and François Gardes ()
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François Gardes: Centre d'Economie de la Sorbonne - Paris School of Economics, https://centredeconomiesorbonne.univ-paris1.fr

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: The panel structure of the Survey on Smoking in Canada (1994-95) and novel methods are used to estimate the impact of an important decrease in the levels of taxation of cigarettes occurring in five out of the ten Canadian provinces that intended to eradicate black market sales of cigarettes in the spring of 1994. Given that black market sales have recently increased substantially because of new taxes, a complete and thorough analysis of the 1994 policy is of particular importance for policy makers. We revisit the issue with new econometric methods to address this evaluation problem as well as focus on particular sub-groups in the Canadian population. The large sample permits precise estimation of the impact of the policy by sub-group showing that females, young males, the poorly educated and separated or divorced individuals were particularly sensitive to these dramatic changes in cigarette prices. We also compute under realistic assumptions a price-elasticity for the probability of smoking and a lower bound on the price-elasticity for the quantities of cigarettes smoked

Keywords: Cigarette; price-elasticity; difference in difference (search for similar items in EconPapers)
JEL-codes: D1 E2 H2 I1 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2014-03
New Economics Papers: this item is included in nep-ger and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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ftp://mse.univ-paris1.fr/pub/mse/CES2014/14027.pdf (application/pdf)

Related works:
Working Paper: Revisiting an important Canadian natural experiment with new methods: an evaluation of the impact of the 1994 tax decrease on smoking (2014)
Working Paper: Revisiting an important Canadian natural experiment with new methods: an evaluation of the impact of the 1994 tax decrease on smoking (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:14027

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