<25 miles 3 1
Number with decrease
>25 miles 28 1
Average change in
distance 28.84 129.65
Standard deviation of
change in distance 162.81 158.5
Source: Author's calculation of distance to the closest lower-priced
border state, excluding Native American Reservations.
TABLE 4
ROBUSTNESS CHECK USING ALTERNATIVE ESTIMATION PROCEDURES
Procedure Tax Burden (D) Tax Burden (L)
OLS -0.5470 -0.6905
with robust VCE for (-3.59) (-3.20)
heteroscedasticity
with panel-corrected standard (-2.88) (-3.35)
errors
with robust VCE for (-5.43) (-6.57)
heteroscedasticity and
cross-sectional correlation
FGLS (weighted on groupwise -0.5086 -0.6494
heteroscedasticity)
with robust VCE for (-3.83) (-3.89)
heteroscedasticity
with panel-corrected standard (-3.52) (-4.43)
errors
with robust VCE for (-3.54) (-8.00)
heteroscedasticity and
cross-sectional correlation
DPD (difference) -0.6834 -0.8547
Arellano-Bond one-step procedure (-3.65) (-3.67)
DPD (difference) -0.5341 -0.7684
Arellano-Bond two-step procedure (-1.74) (-2.16)
Note: Coefficient estimates are boldface; t-statistics are reported
in parentheses. Each estimation procedure estimates the same
variable specification as column 2 of Table 3. The first set of
OLS results repeats those results for comparisons sake. The
respective estimation procedures are described in greater detail
in the fourth section.
TABLE 4 MEAN LOG CIGARETTE RESIDUALS FROM CIGARETTE DEMAND MODELS
EXCLUDING SMUGGLING VARIABLES, BY DISTANCE QUARTILE
First Second
Independent Variable Quartile Quartile
Full log cigarette residual 0.005 0.003
(0.329) (0.334)
Intensive log cigarette residual 0.004 0.0002
(0.176) (0.185)
Extensive log cigarette residual 0.0003 -0.0001
(0.026) (0.035)
Third Fourth
Independent Variable Quartile Quartile
Full log cigarette residual -0.011 -0.005
(0.345) (0.359)
Intensive log cigarette residual -0.008 -0.010
(0.191) (0.215)
Extensive log cigarette residual -0.0005 0.0007
(0.031) (0.032)
Notes:
(1.) The table shows mean residuals from a regression of log mean MSA
cigarette consumption on log home state cigarette price and mean MSA
demographic characteristics by quartile of distance to a lower-price
locality. Standard deviations are in parentheses.
(2.) All regressions include fixed effects for each unique state-MSA
combination and are weighted by the number of observations that
constitute each MSA-level mean. MSA means of the following variables
are included in the regressions: age, percent male, percent married,
weekly wage, percent Black, percent Native American, percent Hispanic,
percent Asian, percent high school diploma, percent some college,
percent associates degree, percent BA, percent graduate school,
percent working, and percent unemployed as well as a linear year trend.
Full regression estimates are available from the author upon request.
(3.) Home state cigarette prices are instrumented with home state
cigarette taxes in all regressions.
TABLE 5
MEANS OF SELECTED CPS VARIABLES FROM THE TOBACCO SUPPLEMENT
SURVEYS BY YEAR
Variable 1992-1993 1995-1996
Cigarettes per day (all) 3.25 3.01
(1.00) (1.07)
Cigarettes per day (smokers) 16.91 16.60
(2.43) (2.84)
Percent smokers 0.23 0.22
(0.05) (0.05)
Real home state price 2.27 2.26
(0.25) (0.30)
Price difference (without Native 0.21 0.26
American Reservations) (0.14) (0.24)
Price difference (with Native 0.29 0.35
American Reservations) (0.19) (0.26)
Real home state tax 0.48 0.54
(0.16) (0.23)
Tax difference (without Native 0.14 0.21
American Reservations) (0.14) (0.19)
Tax difference (with Native 0.24 0.30
American Reservations) (0.21) (0.23)
Distance (without Native 89.56 91.74
American Reservations) (86.11) (87.43)
Distance (with Native 65.88 62.95
American Reservations) (66.44) (63.07)
Age 42.67 42.89
(2.37) (2.40)
Percentage male 0.53 0.52
(0.03) (0.03)
Percentage married 0.55 0.55
(0.06) (0.07)
Real weekly wage 70.85 76.29
(43.80) (22.52)
Percentage black 0.13 0.13
(0.11) (0.12)
Percentage Native American 0.003 0.01
(0.01) (0.01)
Percentage Hispanic 0.08 0.09
(0.11) (0.12)
Percentage Asian 0.02 0.03
(0.03) (0.04)
Percentage HS diploma 0.32 0.31
(0.06) (0.06)
Percentage some college 0.18 0.19
(0.05) (0.04)
Percentage associates degree 0.06 0.07
(0.02) (0.03)
Percentage BA 0.14 0.16
(0.04) (0.05)
Percentage graduate school 0.07 0.08
(0.03) (0.03)
Percentage work 0.61 0.63
(0.06) (0.07)
Percentage unemployed 0.05 0.04
(0.02) (0.02)
Variable 1998-1999 2001-2002
Cigarettes per day (all) 2.59 2.29
(0.94) (1.00)
Cigarettes per day (smokers) 15.77 14.83
(2.80) (2.82)
Percent smokers 0.20 0.19
(0.05) (0.05)
Real home state price 2.83 3.67
(0.41) (0.45)
Price difference (without Native 0.31 0.35
American Reservations) (0.25) (0.27)
Price difference (with Native 0.43 0.45
American Reservations) (0.31) (0.32)
Real home state tax 0.63 0.68
(0.29) (0.32)
Tax difference (without Native 0.26 0.28
American Reservations) (0.22) (0.22)
Tax difference (with Native 0.40 0.40
American Reservations) (0.30) (0.31)
Distance (without Native 93.02 98.94
American Reservations) (85.68) (96.92)
Distance (with Native 67.91 74.41
American Reservations) (65.49) (80.95)
Age 42.95 43.15
(2.51) (2.54)
Percentage male 0.52 0.52
(0.03) (0.03)
Percentage married 0.53 0.53
(0.06) (0.06)
Real weekly wage 87.71 72.06
(26.74) (51.52)
Percentage black 0.13 0.12
(0.11) (0.12)
Percentage Native American 0.01 0.01
(0.01) (0.01)
Percentage Hispanic 0.10 0.10
(0.13) (0.12)
Percentage Asian 0.03 0.03
(0.04) (0.04)
Percentage HS diploma 0.30 0.29
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