Why are taxes, one traditional remedy for negative externalities, less than ideal for smoking cessation in the United States?
Nicotine is addictive/demand is inelastic, and smokers are mostly poor, so in effect cigarette taxes reduce the quality of life of people we’re trying to help without substantially reducing smoking
Demand is inelastic, and smokers are mostly rich, so they don’t reduce smoking as a result of taxes
Demand is elastic, and smokers are mostly old, so taxes reduce smoking but cause increased anxiety among the elderly
Demand is elastic, and smokers are mostly young, so they quit smoking but are then more likely to experiment with illegal drugs
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