Monday, April 30, 2007

IN approves 44 cents increase in cigarette tax

http://www.insideindianabusiness.com/newsitem.asp?id=23058.

Prices of a pack of cigs vary of course in IN, but let's make the reasonable assumption that a pack on average costs $3.60. Let's also assume elasticity of demand for cigs in inelastic (but not terribly so) is around -.3 (which is also reasonable given research). That means a 44 cent tax hike would reduce consumption of cigs by about 3.6% - not much, but better than nothing.
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2 comments:

  1. Joye 510January 6, 2011 at 2:45 AM

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    ReplyDelete
  2. Clip-onsJanuary 10, 2011 at 1:23 AM

    In the history of boasts about sexual bravado, that one doesn't rank so highly in the memorable quotes chapter.

    ReplyDelete