Playing with fire
Subtitle: cigarettes, taxes and competition from the internet
By: Austan Goolsbee, Michael Lovenheim, Joel B. Slemrod.
Contributors: Lovenheim, Michael,; Slemrod, Joel B.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 15612; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 15612.
Publisher: National Bureau of Economic Research
Published: 2009
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "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, the 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"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 1/5/2010.

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