| Publication type: | Conference poster |
| Type of review: | Peer review (abstract) |
| Title: | Thank you for smoking! : how loopholes create big rents for big tobacco |
| Authors: | Kohler, Andreas |
| et. al: | No |
| Conference details: | iHEA 2021 World Congress on Health Economics, virtual, 12-15 July 2021 |
| Issue Date: | 2021 |
| Language: | English |
| Subject (DDC): | 338: Production 340: Law |
| Abstract: | While legal loopholes in regulations are ubiquitous in many sectors of the economy, understanding and estimating their economic effects is challenging. Using an example from the tobacco sector, this paper illustrates how legal loopholes are exploited, and quantifies their economic effects. Since 2004 the EU has effectively banned the production of cigarettes exceeding maximum yield limits of 10 mg tar, 1 mg nicotine, and 10 mg carbon monoxide, whereas Switzerland still allows the production of stronger cigarettes for the export market. Cigarette exports from Switzerland to countries with laxer or no maximum yield limits skyrocketed after 2004. I identify the effect of this loophole in Switzerland’s tobacco regulation by carefully constructing various comparison groups, and quantify it by implementing a difference-in-difference estimator and synthetic control method. I show that the loophole creates big rents in the form of additional foreign sales for Big Tobacco, the world’s five biggest tobacco companies. In the decade from 2004 to 2014, Big Tobacco’s foreign sales were between $1.5 billion and $2.5 billion higher than they would have been without the loophole in Switzerland’s tobacco regulation. |
| URI: | https://digitalcollection.zhaw.ch/handle/11475/24897 |
| Fulltext version: | Published version |
| License (according to publishing contract): | Licence according to publishing contract |
| Departement: | School of Management and Law |
| Organisational Unit: | Winterthur Institute of Health Economics (WIG) |
| Appears in collections: | Publikationen School of Management and Law |
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Kohler, A. (2021). Thank you for smoking! : how loopholes create big rents for big tobacco. iHEA 2021 World Congress on Health Economics, Virtual, 12-15 July 2021.
Kohler, A. (2021) ‘Thank you for smoking! : how loopholes create big rents for big tobacco’, in iHEA 2021 World Congress on Health Economics, virtual, 12-15 July 2021.
A. Kohler, “Thank you for smoking! : how loopholes create big rents for big tobacco,” in iHEA 2021 World Congress on Health Economics, virtual, 12-15 July 2021, 2021.
KOHLER, Andreas, 2021. Thank you for smoking! : how loopholes create big rents for big tobacco. In: iHEA 2021 World Congress on Health Economics, virtual, 12-15 July 2021. Conference poster. 2021
Kohler, Andreas. 2021. “Thank You for Smoking! : How Loopholes Create Big Rents for Big Tobacco.” Conference poster. In iHEA 2021 World Congress on Health Economics, Virtual, 12-15 July 2021.
Kohler, Andreas. “Thank You for Smoking! : How Loopholes Create Big Rents for Big Tobacco.” iHEA 2021 World Congress on Health Economics, Virtual, 12-15 July 2021, 2021.
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