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Over-the-road smuggling occurs when bulk cigarettes are purchased legally in low-tax states and shipped to higher-tax states, where the cigarettes may or may not receive counterfeit stamps and then sold in legal markets.[] Our empirical model controls only for over-the-road smuggling, as has been common in the literature, with the exception of Thursby and Thursby (2000)

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Consumers are increasingly willing to pay more for differentiated tastes, quality packaging, and brand experience