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NCJ Number: 63095 Find in a Library
Title: ECONOMETRIC MODEL OF CIGARETTE SMUGGLING DETERRENCE (FROM CRIMINAL JUSTICE STATISTICS ASSOCIATION, INC PROCEEDINGS..., 1978 - SEE NCJ-63086)
Author(s): M C GRITZKE
Corporate Author: Justice Research and Statistics Association
United States of America
Date Published: 1978
Page Count: 9
Sponsoring Agency: Justice Research and Statistics Association
Washington, DC 20002
National Institute of Justice/
Rockville, MD 20849
US Dept of Justice
Washington, DC 20531
Grant Number: 77-AF AX 0027
Sale Source: National Institute of Justice/
NCJRS paper reproduction
Box 6000, Dept F
Rockville, MD 20849
United States of America
Document: PDF
Type: Program/Project Evaluation
Language: English
Country: United States of America
Annotation: AN ECONOMIC MARKET MODEL IS USED TO DETERMINE THE DETERRENT EFFECT OF USING FOUR FULL-TIME INVESTIGATORS TO COUNTER CIGARETTE SMUGGLING IN MINNESOTA.
Abstract: MINNESOTA LOSES AN ESTIMATED $12.2 MILLION PER YEAR IN CIGARETTE TAXES DUE TO SMUGGLING. IN HIRING FOUR FULL-TIME INVESTIGATORS, THE HOPE WAS TO INCREASE CIGARETTE TAX REVENUES BY $500,000 IN THE FIRST YEAR OF OPERATION. THIS REVENUE INCREASE WAS EXPECTED TO OCCUR AS THE INVESTIGATORS' ACTIVITIES FORCED A DECREASE IN UNTAXED CIGARETTES THEREBY FORCING MORE PURCHASERS INTO THE LEGITIMATE (UNTAXED) MARKET. THE SIMULTANEOUS EQUATION MODEL ESTIMATED BY THE TWO-STAGE LEAST SQUARES TECHNIQUE IS COMPOSED OF A SUPPLY AND A DEMAND EQUATION, WHERE THE LEVELS OF CIGARETTE SUPPLY AND DEMAND ARE MEASURED BY CIGARETTE TAXES COLLECTED. CIGARETTE PRICES WERE FOUND TO HAVE A SIGNIFICANT EFFECT ON CIGARETTE SUPPLY BUT NOT ON CIGARETTE DEMAND. NEITHER THE PERSONAL INCOME LEVEL, POPULATION LEVEL, NOR LEGISLATIVE ATTEMPTS TO ALTER SMOKING HABITS HAVE HAD A SIGNIFICANT EFFECT ON CIGARETTE TAXES COLLECTED PRIOR TO JULY 1976. USING THE MODEL, CIGARETTE TAX REVENUES ARE PROJECTED BEYOND JULY 1976 AND ARE COMPARED TO ACTUAL TAX REVENUES COLLECTED OVER THE SAME PERIOD; HOWEVER, THE STATISTICAL ERROR FOUND AROUND THE PREDICTED REVENUE LEVELS IS TOO LARGE TO GAUGE WHETHER THE INVESTIGATORS HAVE MET THEIR GOAL OF RAISING CIGARETTE TAX REVENUES. TABULAR DATA, MATHEMATICAL EQUATIONS, AND REFERENCES ARE PROVIDED. (AUTHOR ABSTRACT MODIFIED--RCB)
Index Term(s): Deterrence effectiveness; Economic analysis; Evaluation techniques; Mathematical modeling; Minnesota; Program evaluation; Smuggling/Trafficking
To cite this abstract, use the following link:
http://www.ncjrs.gov/App/publications/abstract.aspx?ID=63095

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