%0 Report
        %A Adda, Jérôme
%A Cornaglia, Francesca
        %T Taxes, Cigarette Consumption and Smoking Intensity
        %D 2005
        %8 2005 Nov
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 1849
        %U https://www.iza.org/index.php/publications/dp1849
        %X This paper analyses the compensatory behavior of smokers. Exploiting data on cotinine concentration – a metabolite of nicotine – measured in a large population of smokers over time, we show that smokers compensate tax hikes by extracting more nicotine per cigarette. Our study makes two important contributions. First, as smoking more intensively a given cigarette is detrimental to health, our results question the usefulness of tax increases. Second, we develop a model of rational addiction where agents can also adjust their intensity of smoking and we show that the previous empirical results suffer from severe estimation biases.
        %K smoking
%K cigarettes
%K addiction
%K taxes