Taxes, Cigarette Consumption, and Smoking Intensity: Reply

摘要

The economic literature has long established the positive relationship between cigarette taxes, prices, and cigarette consumption. Recently, attention has been brought to the fact that the behavior of smokers may offset the consumption effect of a tax increase (Adda and Cornaglia 2006). In a later contribution Abrevaya and Puzzello (2012)-henceforth, AP (2012)-re-examined Adda and Cornaglia's (2006)-henceforth, AC (2006)-analysis using a larger sample from the same source and have cast some doubts on the robustness of AC's (2006) analysis. In particular, they claim that the limited within-state tax variation observed in the dataset does not lead to precise cigarettes and cotinine tax-elasticities estimates. AP (2012) also argue that the use of the appropriate statistical inference leads to a further decrease in the precision of AC's (2006) estimates.