How far to the border? The extent and impact of cross - border casual cigarette smuggling.

Home Tax Home State State Tax Changes Alabama 0.30 0 Arkansas 0.45 3 Arizona 0.69 1 California 0.84 2 Colorado 0.30 0 Connecticut 0.72 1 Washington, D.C. 0.86 1 Delaware 0.27 0 Florida 0.53 0 Georgia 0.20 0 Iowa 0.53 0 Idaho 0.41 1 Illinois 0.70 2 Indiana 0.29 0 Kansas 0.39 0 Kentucky 0.16 0 Louisiana 0.32 1 Massachusetts 0.80 2 Maryland 0.65 1 Maine 0.80 2 Michigan 0.82 1 Minnesota 0.72 0 Missouri 0.27 1 Mississippi 0.36 0 North Carolina 0.14 0 North Dakota 0.63 1 Nebraska 0.48 1 New Hampshire 0.42 2 New Jersey 0.79 1 New Mexico 0.34 1 Nevada 0.57 0 New York 0.76 2 Ohio 0.38 1 Oklahoma 0.37 0 Oregon 0.57 2 Pennsylvania 0.49 0 Rhode Island 0.90 3 South Carolina 0.19 0 South Dakota 0.43 1 Tennessee 0.33 0 Texas 0.63 0 Utah 0.56 1 Virginia 0.13 0 Vermont 0.58 1 Washington 1.00 3 Wisconsin 0.77 3 West Virginia 0.33 0 Home State Closest Lower Price jurisdictions Alabama GA, MS, TN Arkansas MO, MS, OK Arizona CA, NM, NV, NAR California AZ, NV, NAR Colorado KS, NM, OK, WY, NAR Connecticut MA, NH, NJ, NY, PA, RI, VT, NAR Washington, D.C. VA Delaware NC, VA Florida AL, GA, NAR Georgia NC, SC, NAR Iowa IL, MO, NE, NAR Idaho MT, NAR Illinois IA, IN, MO, WI Indiana KY Kansas KY, MO, NC, OK Kentucky VA, WV, NAR Louisiana AR, GA, MO, MS, NAR Massachusetts CT, NH, RI Maryland PA, VA, WV Maine NH Michigan IN, OH Minnesota IA, ND, WI Missouri KS, KY Mississippi LA, IN, NAR North Carolina KY, SC, VA, NAR North Dakota SD, NAR Nebraska IA, KS New Hampshire DE, VA, NAR New Jersey CT, DE, NY, PA New Mexico CO, WY, NAR Nevada AZ, ID, OR, UT, NAR New York CT, NJ, PA, VT, NAR Ohio IN, KY, WV Oklahoma KS, MO Oregon CA, ID, NV Pennsylvania DE, OH, WV Rhode Island CT, MA, NH, NAR South Carolina GA, KY, NC, NAR South Dakota IA, MO, ND, NAR Tennessee GA, KY, MO, NC, VA, NAR Texas LA, NM, OK, NAR Utah WY, NAR Virginia KY, NC, WV, NAR Vermont NH Washington ID, OR Wisconsin IA, IL, MI, MN, NAR West Virginia KY, OH, VA

Average Average Average

Distance Price Tax Home State (miles) Difference Difference Alabama 50.2 0.19 0.08 Arkansas 65.4 0.14 0.13 Arizona 85.5 0.50 0.47 California 72.8 0.78 0.78 Colorado 113.8 0.13 0.12 Connecticut 25.7 0.60 0.59 Washington, D.C. 3.5 0.80 0.73 Delaware 118.4 0.10 0.13 Florida 52.7 0.47 0.47 Georgia 91.7 0.08 0.04 Iowa 52.9 0.46 0.46 Idaho 101.7 0.41 0.41 Illinois 29.3 0.49 0.39 Indiana 108.6 0.11 0.12 Kansas 124.3 0.13 0.12 Kentucky 204.3 0.13 0.12 Louisiana 64.2 0.25 0.23 Massachusetts 11.9 0.53 0.37 Maryland 20.4 0.36 0.31 Maine 32.4 0.41 0.39 Michigan 61.2 0.65 0.47 Minnesota 71.2 0.25 0.16 Missouri 204.4 0.13 0.10 Mississippi 44.4 0.12 0.12 North Carolina 105.1 0.09 0.08 North Dakota 63.2 0.63 0.63 Nebraska 45.0 0.06 0.03 New Hampshire 110.1 0.42 0.42 New Jersey 24.0 0.33 0.24 New Mexico 36.4 0.34 0.34 Nevada 188.8 0.50 0.50 New York 26.0 0.50 0.44 Ohio 78.3 0.11 0.12 Oklahoma 122.0 0.11 0.06 Oregon 274.5 0.23 0.13 Pennsylvania 38.3 0.17 0.20 Rhode Island 16.0 0.19 0.27 South Carolina 54.8 0.09 0.07 South Dakota 138.0 0.36 0.33 Tennessee 46.3 0.24 0.18 Texas 116.5 0.44 0.43 Utah 43.0 0.56 0.56 Virginia 59.8 0.13 0.05 Vermont 61.2 0.22 0.17 Washington 118.6 0.64 0.44 Wisconsin 43.1 0.42 0.37 West Virginia 43.4 0.08 0.08 Note: Prices and taxes are in real 2004 dollars. Closest lower-price jurisdictions are all localities that have a lower-price than the home state at some time during the sample period. "NAR" refers to Native American Reservations. Source: Author's calculation as described in the text. Averages refer to average values across MSAs within each state. TABLE 3 CHANGES IN DISTANCE TO LOWER-PRICE BORDERS BETWEEN EACH CPS SURVEY

Survey Dates Change 9/92-1/93 1/93-5/93 5/93-9/95 Number with no

distance change 236 256 236 Number with increase

<25 miles 4 2 5 Number with increase

>25 miles 11 5 16 Number with decrease

<25 miles 2 2 1 Number with decrease

>25 miles 15 3 10 Average change in

distance -18.16 60.23 -13.44 Standard deviation of

change in distance 81.35 143.62 114.45

Survey Dates Change 9/95-1/96 1/96-5/96 5/96-9/98 Number with no

distance change 249 266 193 Number with increase

<25 miles 3 0 10 Number with increase

>25 miles 3 2 30 Number with decrease

<25 miles 6 0 7 Number with decrease

>25 miles 7 0 28 Average change in

distance -29.25 111.41 -13.04 Standard deviation of

change in distance 71.79 38.37 136.67

Survey Dates Change 9/98-1/99 1/99-5/99 5/99-6/01 Number with no

distance change 246 264 249 Number with increase

<25 miles 2 1 1 Number with increase

>25 miles 7 2 7 Number with decrease

<25 miles 3 0 3 Number with decrease

>25 miles 10 1 8 Average change in

distance -10.23 23.82 -18.14 Standard deviation of

change in distance 92.09 59.88 99.66

Survey Dates Change 6/01-11/01 11/01-2/02 Number with no

distance change 208 261 Number with increase

<25 miles 7 7 Number with increase

>25 miles 22 4 Number with decrease