Meddlesome preferences and rent extraction: the tobacco shakedown
tobacco has become an arena of civil warfare throughout the Western
world over the past half-century or so. This war has been fueled by an
ideological rhetoric that speaks of the costs that smokers place on nonsmokers
(Office of Technology Assessment (1985)(1993)). The state claims to wage the
war to protect innocent nonsmokers from predatory attacks by smokers. This
claim has now been thoroughly refuted, starting with Tollison and Wagner (1988),
as extended in Tollison and Wagner (1992). Whereas Tollison and Wagner
argue that those costs are borne wholly by smokers, such authors as Manning et
al. (1989), Gravelle and Zimmerman (1994), and Viscusi (1997) argue that there
are some modest costs shifted onto nonsmokers, but that those costs are
significantly less than the excise taxes that are currently imposed on cigarettes.
As a result, smokers do not impose costs on nonsmokers but rather subsidize
nonsmokers. Yet the war on tobacco continues, and in a big way. What the
continuation of the war perhaps illustrates is the interaction between
meddlesome preferences and rent extraction.
See the full article at: http://mason.gmu.edu/~rwagner/Meddlesome%20preferences%20and%20rent%20extraction%20rwagner.PDF
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tobacco has become an arena of civil warfare throughout the Western
world over the past half-century or so. This war has been fueled by an
ideological rhetoric that speaks of the costs that smokers place on nonsmokers
(Office of Technology Assessment (1985)(1993)). The state claims to wage the
war to protect innocent nonsmokers from predatory attacks by smokers. This
claim has now been thoroughly refuted, starting with Tollison and Wagner (1988),
as extended in Tollison and Wagner (1992). Whereas Tollison and Wagner
argue that those costs are borne wholly by smokers, such authors as Manning et
al. (1989), Gravelle and Zimmerman (1994), and Viscusi (1997) argue that there
are some modest costs shifted onto nonsmokers, but that those costs are
significantly less than the excise taxes that are currently imposed on cigarettes.
As a result, smokers do not impose costs on nonsmokers but rather subsidize
nonsmokers. Yet the war on tobacco continues, and in a big way. What the
continuation of the war perhaps illustrates is the interaction between
meddlesome preferences and rent extraction.
See the full article at: http://mason.gmu.edu/~rwagner/Meddlesome%20preferences%20and%20rent%20extraction%20rwagner.PDF
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