Title page for ETD etd-051099-181400


Type of Document Master's Thesis
Author Ensign, Christopher J
URN etd-051099-181400
Title CASHING IN ON DYING EARLY? “THE IMPACT OF ERROR TERMS ON THE ESTIMATION OF THE EXTERNAL COSTS OF SMOKING.”
Degree Master of Arts
Department Economics (Arts and Sciences)
Advisory Committee
Advisor Name Title
Waud, Roger N. Committee Chair
Reid, Brian K. Committee Member
Keywords
  • smoking externalities
  • estimating errors
Date of Defense 1999-04-26
Availability unrestricted
Abstract
Cigarette taxation is a topic which economists have focused on for years. The

purpose of the cigarette tax is to force individuals who engage in risky activities to pay

for the negative externalities caused by said activities. In the case of cigarette smoking,

the notion has been that society as a whole subsidizes the smoking related external

expenses through programs such as Medicare, Medicaid and group life and health

insurance. At the center of this debate is “Cigarette Taxation and the Social

Consequences of Smoking” by W. Kip Viscusi. Viscusi’s paper written in 1995 for the

NBER publication Tax Policy and the Economy contains estimates of both the net

external costs and benefits of smoking. This paper evaluates the confidence level of

Viscusi’s external cost and savings estimates and assesses the impact of error terms on

his conclusions. By allowing the potential for error to factor into the cost estimates of

external costs per pack, Viscusi’s point estimate becomes questionable.

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