A Taxing Dilemma: Assessing the Impact of Tax and Price Changes on the Tobacco Market

May 10, 2012 –  Ian Irvine and William Sims

Government efforts to tax cigarettes in Canada can have unintended consequences for tax revenues and the supply of contraband cigarettes, according to a report released today by the C.D. Howe Institute. In “A Taxing Dilemma: Assessing the Impact of Tax and Price Changes on the Tobacco Market,” Concordia University economists Ian Irvine and William Sims assess the effect of tax policy on tobacco use and, in particular,  on prices and consumer choice between illegal and legal cigarettes.

For the study go to:  http://cdhowe.org/pdf/Commentary_350.pdf