Question: In Chapter 12, state-level panel data were used to estimate the price elastic- ity of demand for cigarettes, using the state sales tax as an

In Chapter 12, state-level panel data were used to estimate the price elastic- ity of demand for cigarettes, using the state sales tax as an instrumental vari- able. Consider in particular regression (1) in Table 12.1. In this case, in your judgment does the local average treatment effect differ from the average treatment effect? Explain.

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