Smoking intensity, compensatory behavior and tobacco tax policy

Files in This Item:
File Description SizeFormat 
gearywp200818.pdf325.46 kBAdobe PDFDownload
Title: Smoking intensity, compensatory behavior and tobacco tax policy
Authors: Irvine, Ian
Permanent link: http://hdl.handle.net/10197/1930
Date: 6-Aug-2008
Abstract: Smokers not only choose the number of cigarettes to smoke in any given period on the basis of price, they also choose the intensity with which to smoke - that is, how much nicotine to inhale. The possibility that quantity-reducing tax policies may be mitigated, or even completely offset, by higher intensity has been raised recently by Adda and Cornaglia (2006). The objective of this paper is to examine this possibility in the context of a utility-maximizing model of smoking that is based on known toxicological patterns. After calibrating this model to reflect observed behaviors, it is concluded that continuing smokers offset about one third of the quantity reducing impact of higher taxes. Compensatory behavior thus reduces tax effectiveness, but does not render it neutral. While toxicology has long recognized that nicotine inventory management is a key ingredient in smoking behaviour, this paper is the first to incorporate such knowledge into a utility-price based maximizing model.
Type of material: Working Paper
Publisher: University College Dublin. Geary Institute
Keywords: Tobacco;Nicotine;Cotinine;Intensity
Subject LCSH: Tobacco--Taxation
Smoking--Psychology
Utility theory
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Geary Institute Working Papers

Show full item record

Google ScholarTM

Check


This item is available under the Attribution-NonCommercial-NoDerivs 3.0 Ireland. No item may be reproduced for commercial purposes. For other possible restrictions on use please refer to the publisher's URL where this is made available, or to notes contained in the item itself. Other terms may apply.