CIGARETTE TAXES: Conclusion 2

We then compute the mean level of unhappiness and excise taxes for each predicted smoker group in each province in each survey year, and regress the change in mean happiness on the change in mean excise taxes separately for each group, including a full set of year dummies to capture time trends. For predicted smokers,…

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CIGARETTE TAXES: Conclusion

But, in fact, we do not measure the present discounted value of utility, only happiness at a point in time. This makes interpretation of the results somewhat more complicated. For a time consistent consumer, the effect of taxes on today‚Äôs utility is clearly negative, but the effect on future happiness can be positive. This is…

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CIGARETTE TAXES: Alternative Interpretations 2

If family utility was being maximized, and family members were better off with less smoking, then smoking would have already fallen. But this is a very different type of failure than that discussed earlier, so it is important to distinguish whether this is driving our results. We investigate this possibility in two ways in Table…

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CIGARETTE TAXES: Alternative Interpretations

We therefore add to our regression specification these tax variables, as well as their own interactions with predicted smoking. In column, we see the effect of the beer tax, in column 2, the effect of the gas tax, in column 3 the effect of the sales tax and in column 4, the effect of total…

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CIGARETTE TAXES: Specification Checks

At the same time, the data reviewed earlier suggests that smoking is a very negative influence in the lives of many smokers so it is plausible that there could be large effects on happiness from smoking reduction. Nevertheless, given these large magnitudes, we turn next to specification checks to demonstrate that the estimates are robust….

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CIGARETTE TAXES: Basic Results 2

There are two ways to gauge these magnitudes. The first is to contrast the impact of excise taxation to other predictors of happiness. For example, the results in columns and suggest that being a predicted smoker with no excise tax raises unhappiness by 7.5 percentage points in the U.S. and by 9.6 percentage points in…

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CIGARETTE TAXES: Basic Results

We then estimate equations of the form: where the coefficient of interest is now y. So we are now asking whether deviations in cigarette taxes from their state-specific mean cause a relative change in the happiness of predicted smokers relative to those unlikely to smoke. We also include the set of covariates, X, that were…

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