The Effect of Cigarette Taxation on Prices: An Empirical Analysis using City-Level Data Ryan Sullivan Department of Economics, Syracuse University 110 Eggers Hall Syracuse University Syracuse, NY 13244 rssulliv@maxwell.syr.edu Abstract: This paper uses new data collected by the author on cigarette taxation in 443 municipalities from 1990 to 2009. These data are combined with state-level price and tax information to measure the relative effects of state and local taxes on cigarette prices. The results suggest that a $1 increase in the state excise cigarette tax increases cigarette prices by $1.10 to $1.13, but that a $1 increase in city or county- level excise taxes has a significantly smaller positive effect on prices of $1.06. These findings are similar between premium and generic cigarette brands.