Replication data for: Playing with Fire: Cigarettes, Taxes, and Competition from the Internet

Principal Investigator(s): View help for Principal Investigator(s) Austan Goolsbee; Michael F. Lovenheim; Joel Slemrod

Version: View help for Version V1

Name	File Type	Size	Last Modified
LICENSE.txt	text/plain	14.6 KB	10/13/2019 02:12:AM
Playingwithfire-replication.do	text/plain	6.4 KB	10/13/2019 02:12:AM
Readme.pdf	application/pdf	10.8 KB	10/13/2019 02:12:AM
Table-3-P-values.do	text/plain	2.8 KB	10/13/2019 02:12:AM
playingwithfire-aej.dta	application/octet-stream	108.5 KB	10/13/2019 02:12:AM

Project Citation:

Goolsbee, Austan, Lovenheim, Michael F., and Slemrod, Joel. Replication data for: Playing with Fire: Cigarettes, Taxes, and Competition from the Internet. Nashville, TN: American Economic Association [publisher], 2010. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-13. https://doi.org/10.3886/E114726V1

Project Description

Summary: This paper documents the rise of the Internet as a source of state tax-free cigarettes and its impact on taxed sales elasticities. Using data on cigarette tax rates, taxable cigarette sales and individual smoking rates by state from 1980 to 2005 merged with data on Internet penetration, this paper documents that there has been a substantial increase in the sensitivity of taxable cigarette sales to state tax rates that is correlated with the rise of Internet usage within states. The estimates imply that the increased sensitivity from cigarette smuggling over the Internet has lessened the revenue generating potential of cigarette tax increases significantly, although states are still far from the revenue-maximizing tax rates. (JEL D12, H25, H31, H71, L66)

Scope of Project

JEL Classification:
      D12 Consumer Economics: Empirical Analysis
      H25 Business Taxes and Subsidies including sales and value-added (VAT)
      H31 Fiscal Policies and Behavior of Economic Agents: Household
      H71 State and Local Taxation, Subsidies, and Revenue
      L66 Food; Beverages; Cosmetics; Tobacco; Wine and Spirits

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Published Versions

V1 [2019-10-13]

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