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Litigation and the Political Clout of the Tobacco Companies: Cigarette Taxes, Prices, and the Master Settlement Agreement

Author

Listed:
  • Frank A. Sloan

    (Center for Health Policy, Law & Management, Duke University)

  • Justin G. Trogdon

    (School of Economics, University of Adelaide)

Abstract
The goal of our empirical analysis is to assess whether the changes in cigarette excise taxes and cigarette prices can be attributed to litigation brought by the states and the resulting settlements, holding other factors constant. Using pre-post as well as state excise taxes on beer as controls, the evidence provides support for the view that litigation changes the political equilibrium: state cigarette excise taxes were approximately $0.10 higher in the post-MSA period. For tobacco prices, the increases are attributable to the method the settlement used to structure payments as well as the market structure of the cigarette industry.

Suggested Citation

  • Frank A. Sloan & Justin G. Trogdon, 2004. "Litigation and the Political Clout of the Tobacco Companies: Cigarette Taxes, Prices, and the Master Settlement Agreement," HEW 0411002, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwphe:0411002
    Note: Type of Document - pdf; pages: 42
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/hew/papers/0411/0411002.pdf
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    References listed on IDEAS

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    Cited by:

    1. Philip J. Cook & Jan Ostermann & Frank A. Sloan, 2005. "The Net Effect of an Alcohol Tax Increase on Death Rates in Middle Age," American Economic Review, American Economic Association, vol. 95(2), pages 278-281, May.
    2. Armineh Zohrabian & Tomas J Philipson, 2010. "External Costs of Risky Health Behaviors Associated with Leading Actual Causes of Death in the U.S.: A Review of the Evidence and Implications for Future Research," IJERPH, MDPI, vol. 7(6), pages 1-13, June.
    3. Frank A. Sloan & Justin G. Trogdon, 2004. "The impact of the master settlement agreement on cigarette consumption," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(4), pages 843-855.
    4. Philip J. Cook & Jan Ostermann & Frank A. Sloan, 2005. "Are Alcohol Excise Taxes Good For Us? Short and Long-Term Effects on Mortality Rates," NBER Working Papers 11138, National Bureau of Economic Research, Inc.
    5. Sloan, Frank A. & Trogdon, Justin G. & Mathews, Carrie A., 2005. "Litigation and the value of tobacco companies," Journal of Health Economics, Elsevier, vol. 24(3), pages 427-447, May.

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    More about this item

    Keywords

    Master Settlement Agreement; excise tax; tobacco;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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