TY  - RPRT
        AU  - Adda, Jérôme
AU  - Cornaglia, Francesca
        TI  - Taxes, Cigarette Consumption and Smoking Intensity
        PY  - 2005/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1849
        UR  - https://www.iza.org/index.php/publications/dp1849
        AB  - 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.
        KW  - smoking
KW  - cigarettes
KW  - addiction
KW  - taxes
        ER  -