Cigarette smoking is the single most preventable cause of death and disease in the United States. Each year, more than 443,000 people die prematurely due to cigarette use. Existing literature has shown that the raising cigarette price is associated with less cigarette consumption, the reduction in smoking initiation, and the increase in smoking cessation. Consequently, raising excise tax on cigarettes is one of the most cost-effective ways at reducing the health and economic burden of smoking. However, one of the critical questions to evaluate the effectiveness of cigarette excise tax is the split of the tax between smokers and manufactures. Economic theory and limited empirical evidence suggests that the pass-through rate may depend on the type of excise tax, the cigarette market structure, and behaviors of buyers and sellers in market. Particularly, instead of quitting, current smokers could use price search behaviors to mitigate the effect of raising cigarette tax. Using the most recent data on a national representative telephone survey in the United States, the study is the first to evaluate the cigarette price dispersion and how the tax is shifted to smokers by their price search behaviors.
报告人简介：