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  3. Journal of Economic Perspectives
  4. Fall 1993
  5. Policy Watch: Alcohol and Cigarette Taxes

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Policy Watch: Alcohol and Cigarette Taxes

  • Michael Grossman
  • Jody L. Sindelar
  • John Mullahy
  • Richard Anderson
Journal of Economic Perspectives
vol. 7, no. 4, Fall 1993
(pp. 211–222)
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Abstract

Increased excise taxes on cigarettes and alcohol have been suggested as a means to finance (at least partially) the Clinton administration's proposed program of health care reform. We consider the revenue potential of cigarette and alcohol tax hikes and explore the effects on consumption and related outcomes. We present estimates of the social costs and implied optimal tax rates on cigarettes and alcohol. The bulk of the evidence presented here does support higher taxes on cigarettes and alcohol.

Citation

Grossman, Michael, Jody L. Sindelar, John Mullahy, and Richard Anderson. 1993. "Policy Watch: Alcohol and Cigarette Taxes." Journal of Economic Perspectives, 7 (4): 211–222. DOI: 10.1257/jep.7.4.211

JEL Classification

  • H25 Business Taxes and Subsidies including sales and value-added (VAT
  • L66 Food; Beverages; Cosmetics; Tobacco; Wine and Spirits
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