The Micro-Geography of Tax Avoidance: Evidence from Littered Cigarette Packs in Chicago | Zendy

David Merriman | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Open Access

The Micro-Geography of Tax Avoidance: Evidence from Littered Cigarette Packs in Chicago

Author(s) -

David Merriman

Publication year - 2010

Publication title -

american economic journal economic policy

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 7.868

H-Index - 62

eISSN - 1945-7731

pISSN - 1945-774X

DOI - 10.1257/pol.2.2.61

Subject(s) - tax avoidance , mile , economics , incentive , ad valorem tax , tax reform , sample (material) , public economics , demography , demographic economics , geography , microeconomics , sociology , chemistry , geodesy , chromatography

The large tax differentials between Chicago and neighboring jurisdictions provide an incentive for cigarette tax avoidance. Data from a random sample of cigarette packs littered in Chicago reveals a startling degree of tax avoidance: three-quarters did not display a Chicago tax stamp. Also, the $2.68 difference between the tax in Chicago and surrounding counties decreases the probability of a local stamp by almost 60 percent, and a one mile increase in distance to the lower-tax state border increases the probability a pack of a local stamp by about one percent. These results are consistent with the predictions of economic theory. (JEL H25, H26, H71)

The content you want is available to Zendy users.

Already have an account? Click here to sign in.

Having issues? You can contact us here

Accelerating Research