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Crossing the Line: The Effect of Cross Border Cigarette Sales on State Excise Tax Revenues
| Content Provider | Semantic Scholar |
|---|---|
| Author | Chiou, Lesley Muehlegger, Erich |
| Copyright Year | 2008 |
| Abstract | Differences in excise tax rates across jurisdictions create incentives for consumers to cross the border and purchase in lower-tax jurisdictions. This paper introduces a discrete choice model to examine tax avoidance and state border-crossing in the market for cigarettes. We exploit a rich dataset of consumer location choices and demographics to estimate a consumer’s tradeoff between distance and price when choosing a location to maximize utility. Using the estimates from our location and demand models, we reconsider a recent public policy issue among states and simulate tax avoidance under alternative cigarette excise tax levels. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://sites.hks.harvard.edu/m-rcbg/rpp/Working%20papers/RPP_2008_02_Chiou.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
