Cigarettes: The Right Kind of Pigovian Taxation

http://www.indystar.com/apps/pbcs.dll/article?AID=/20080603/LOCAL18/806030373

As I talk about in my last blog post, it would be fool-hardy to attribute the entire 18% decline in cigarette sales to the increase in the tax, but unlike with gasoline, the tax surely did have a large effect. As the article mentions, the last time the tax was increased for cigarettes, we saw a similar decline in sales.