Price Isn’t Everything: Behavioral Response Around Changes In Sin Taxes

B-Tier
Journal: National Tax Journal
Year: 2023
Volume: 76
Issue: 1
Pages: 5 - 35

Authors (2)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In traditional economic models, taxes change behavior by changing prices. In empirical analyses, factors other than price are thought to be relevant, but any nonprice factors are usually assumed to be held constant as taxes vary. We contend that violations of this assumption are expected when laws are passed changing sin taxes. In support of this claim, we document that state-level cigarette tax increases are concomitant with increases in antismoking appropriations, media coverage on smoking, lobbying efforts, and place-based smoking restrictions. The influence of these nonprice factors is easily confused with price effects, and we find evidence suggesting that controlling for them substantially reduces the estimated demand responsivity to the tax itself.

Technical Details

RePEc Handle
repec:ucp:nattax:doi:10.1086/723093
Journal Field
Public
Author Count
2
Added to Database
2026-01-29