TY  - JOUR
AU  - Cutler,David M.
AU  - Gruber,Jonathan
AU  - Hartman,Raymond S.
AU  - Landrum,M.B., J. Newhouse
AU  - Rosenthal,Meredith B.
TI  - The Economic Impacts of the Tobacco Settlement
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7760
PY  - 2000
Y2  - June 2000
UR  - http://www.nber.org/papers/w7760
L1  - http://www.nber.org/papers/w7760.pdf
N1  - Author contact info:
David M. Cutler
Department of Economics
Harvard University
1875 Cambridge Street
Cambridge, MA  02138
Tel: 617/496-5216
Fax: 617/496-8951
E-Mail: dcutler@harvard.edu

Jonathan Gruber
MIT Department of Economics
E52-355
50 Memorial Drive
Cambridge, MA 02142-1347
Tel: 617/253-8892
Fax: 617/253-1330
E-Mail: gruberj@mit.edu
AB  - Recent litigation against major tobacco companies culminated in a  Master Settlement Agreement' (MSA) under which the participating companies agreed to compensate most states for Medicaid expenses. We outline the terms of the settlement and analyze whether it was a move toward economic efficiency using data from Massachusetts.  Medicaid spending will fall, but only a modest amount ($0.1 billion). The efficiency issue turns mainly on the treatment of health benefits from reduced smoking induced by the settlement.  We conclude that the settlement was a move towards economic efficiency.
ER  -