Conditional Diffusion: Cigarette Taxation, Smoke Free Air Regulation, and Political Ideology in the United States 1971-2006

Abstract:     
This article shows how diffusion of the two policy instruments “cigarette taxation” and “smoke free air regulation” across state borders in the United States is influenced and changed by the ideology of state governments. Developing and applying the concept of conditional diffusion I show 1) that the cigarette taxes in states with liberal governments are positively related to the cigarette taxes in adjacent states, while very conservative governments lower taxes in a high-tax environment and 2) that liberal governments increase the restrictiveness of smoke free air policies if confronted with the diffusion influence from highly restrictive states while conservative governments, under the same circumstances, employ laxer regulation. Taken unconditionally, the ideological positions of governments reveal no influence in an interdependent policy environment. Beyond its subject matter, the article therefore generally calls for a careful specification of cross-jurisdictional influences in models with unit interdependence.

Number of Pages in PDF File: 36

Keywords: Diffusion, Conditional Diffusion, Cigarette taxation, regulation

JEL Classification: E62, H71, H73, I18

working papers series