Question: Why did Harding et al. (2012), discussed in the text, use changes in state-level tax rates on cigarettes rather than across-state differences in tax rates

Why did Harding et al. (2012), discussed in the text, use changes in state-level tax rates on cigarettes rather than across-state differences in tax rates on cigarettes in their study of the impact of cigarette taxes on cigarette prices? Based on their findings, would you expect consumers, on average, to bear a larger incidence of a new tax in a small state with many neighboring states-like Massachusetts-or in a large state like Texas? Explain.

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Comparing states with high tax rates to states with low tax rates is a not a reliable way to measure ... View full answer

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