Per-adult tax-paid cigarette sales (hereafter per-adult sales) can be defined as the sum of in-state consumption and net smuggling, as presented in Equation 1: PCSales it = Cons it + NetSmug it where PCSales is per-adult cigarette sales, Cons represents the in-state per-adult consumption, NetSmug is the per-adult number of packs of cigarettes exported to residents of other states minus the number of packs imported by residents of the home state from other states or other jurisdictions (including Indian reservations and military bases), and i and t indicate state and year
Increased smuggling is a problem
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A Cautionary Tale The impact of high taxes on cigarettes indicates how other policies directed towards tobacco and nicotine products may affect consumer behavior
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