Cigarette demand in Canada and the US-Canadian cigarette smuggling
Using annual data from Canadian provinces, this paper studies the effects of a drastic reduction in Canadian cigarette taxes in 1994 on cross-border smuggling. The results show that the policy was successful in that the border prices seem to not have had a statistically significant impact on cigarette sales. The own price elasticity of cigarette demand in Canada is estimated to be around -0.7. The elasticity is slightly lower when the border-price effects are taken into account and is larger than the corresponding estimates for the USA, implying that dollar-for-dollar there might be greater opportunities for reducing smoking in Canada through higher taxes than the USA.
Year of publication: |
2004
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Authors: | Goel, Rajeev |
Published in: |
Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 11.2004, 9, p. 537-540
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Publisher: |
Taylor & Francis Journals |
Saved in:
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