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How important are the budgetary effects likely to be in the decision to impose a
How important are the budgetary effects likely to be in the decision to impose a further increase in the federal cigarette excise tax? What factors ought to have a major role in the debate? What would you add the CBO’s major disclaimer about their analysis? How important should their analysis be in any real decision-making process? Make sure that you understand the differences between longitudinal analysis, cross-sectional analysis (including logit), and the simulation analysis approaches. Does it appear that CBO used all three? It does not appear that the CBO used a Monte Carlo simulation in the final modeling. Why do you think that they did not do so? States were making large increases in their cigarette taxes during this period. What would you speculate would be the interaction between the two (state and federal), and how would that affect your analysis? Do you think some of that effect was captured by the inclusion of “region” in the regressions? Support your statements with scholarly references and appropriate examples.
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