In 1988, California voters enacted Proposition 99, increasing the tax on cigarettes by 25 cents per pack effective January 1989. Proposition 99 also earmarked 20% of the revenue raised by this new tax for an anti-smoking media campaign and other educational programs to reduce tobacco use. The...

This paper presents a rational addiction model, which integrates the addictive behavior of smokers toward cigarette consumption and the dynamic, profit-maximizing behavior of an oligopoly of cigarette producers. This model is tested on a panel data for eleven western states over the period of...