Smuggling, Camouflaging, and Market Structure

Richard Jensen, Jerry Thursby () and Marie Thursby

No 2630, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine how market structure and enforcement affect smuggling and welfare in a model where smuggling is camouflaged by legal sales. Conditions are given for when some, but not necessarily all, firms smuggle. With camouflaging, the market price is below the price when all sales are legal, so smuggling improves welfare if the price effect outweighs excess smuggling cost. This welfare effect is directly related to the degree of competition. Increased enforcement in this model potentially reduces welfare. The model is shown to be consistent with evidence on cigarette smuggling in the United States for 1975-1982.

Date: 1988-06
Note: ITI IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Published as The Quarterly Journal of Economics, Vol. 106, No. 3, pp. 789-814, (August 1991).

Downloads: (external link)
http://www.nber.org/papers/w2630.pdf (application/pdf)

Related works:
Journal Article: Smuggling, Camouflaging, and Market Structure (1991)
Working Paper: Smuggling, Camouflaging, and Market Structure (1991)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:2630

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w2630

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().