Author : Richard A. Jensen
Publisher :
ISBN 13 :
Total Pages : 60 pages
Book Rating : 4.:/5 (318 download)
Book Synopsis Smuggling, Camouflaging, and Market Structure by : Richard A. Jensen
Download or read book Smuggling, Camouflaging, and Market Structure written by Richard A. Jensen and published by . This book was released on 1988 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine how market structure and enforcement affect smuggling and welfare in a model where smuggling is camoflaged by legal sales. Conditions are given for when some, but not necessarily all, firms smuggle. With camouflaging, the market price is below the price when all sales are legal, so smuggling improves welfare if the price effect outweighs excess smuggling cost. This welfare effect is directly related to the degree of competition. Increased enforcement in this model potentially reduces welfare. The model is shown to be consistent with evidence on cigarette smuggling in the United States for 1975-1982.