TY  - JOUR
AU  - Viscusi, W. Kip
AU  - Hersch, Joni
TI  - Tobacco Regulation through Litigation: The Master Settlement Agreement
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15422
PY  - 2009
Y2  - October 2009
DO  - 10.3386/w15422
UR  - http://www.nber.org/papers/w15422
L1  - http://www.nber.org/papers/w15422.pdf
N1  - Author contact info:
W. Kip Viscusi
Vanderbilt Law School
131 21st Avenue South
Nashville, TN 37203-1181
Tel: 615/343-7715
E-Mail: kip.viscusi@vanderbilt.edu

Joni Hersch
Vanderbilt Law School
131 21st Avenue South
Nashville, TN 37203-1181
E-Mail: joni.hersch@vanderbilt.edu
M1  - published as W. Kip Viscusi, Joni Hersch. "Tobacco Regulation through Litigation: The Master Settlement Agreement," in Daniel P. Kessler, editor, "Regulation vs. Litigation: Perspectives from Economics and Law" University of Chicago Press (2011)

M3  - presented at "Regulation and Litigation Conference", September 11-12, 2009
AB  - The 1998 Master Settlement Agreement resolved the unprecedented litigation in which the states sought to recoup the cigarette-related Medicaid costs.  The litigation was settled through a combination of negotiated regulatory requirements and financial payments of about $250 billion over 25 years.  Settlement payments received by states are strongly related to smoking-related medical costs but are also related to political factors.  The payments largely took the form of an excise tax equivalent, raising potential antitrust concerns.  The regulatory restrictions imposed by the agreement also raised antitrust concerns.  However, there has been no evident shift in industry concentration.  The increase in advertising and marketing expenses has largely taken the form of price discounts.  The settlement sidestepped the usual procedures pertaining to the imposition of taxes and the promulgation of new regulations.
ER  -