Last week, The Guardian, a United Kingdom-based news organization, published an article that cherry-picked language from a 2015 U.S. government report that referenced our cigarette smuggling research.

Nearly four years ago, the government report’s description of our study and its findings seemed too trivial to mount any public explanation of it. Indeed, it read to us like a standard operating statement by scholars who felt compelled to explain why their results were different from others. It’s common for the authors of a scholarly article to compare various models, explain how their modeling choices affect how they discuss the issue at hand, and note how their findings differ from other recent studies. The authors of the government study did all this, and we enjoyed their contribution to the scholarship on cigarette taxes and smuggling, and we have cited their study many times in our subsequent work.

We now feel compelled to weigh in again on that study because language from it has been cherry-picked by The Guardian to apparently create an impression of bias on the part of the Mackinac Center where there is none.

Specifically, the Guardian article reads:

Their (Mackinac Center) findings were criticized in the US government analysis which found “some systemic bias in the estimates” that were “likely overstating tax evasion.”

But the study language reads in full:

This discrepancy suggests some systematic bias in the estimates — likely overstating tax evasion from importing states and understating tax evasion from exporting states (emphasis added).

So the Guardian article leaves out a big qualification about our purported bias by deleting “suggests” and the all-important fact that while our study may overstate tax evasion in some cases, it understates smuggling on the other. If we were in the business of gaming our results — as The Guardian seems to suggest — why would we understate smuggling? We can only speculate, but it seems The Guardian is trying to insinuate that we’re doing the tobacco industry’s bidding and have a bias for overselling smuggling.

The 2015 report, published by the National Research Council and Institute of Medicine, is titled “Understanding the U.S. Illicit Tobacco Market: Characteristics, Policy Context, and Lessons from International Experiences.” It included a section of original estimates by the authors on the degree to which cigarettes are smuggled in the United States.

It was financed by grants from the U.S. Food and Drug Administration and the National Academy of Sciences and was described simply as a “government report” by The Guardian. On balance, the report is interesting and informative, and it concludes that somewhere between 8.5 percent[1] and 21 percent of cigarette consumption in the U.S. is related to tax evasion and avoidance.

It is from this study that The Guardian selectively quotes a review of our work, making it sound as if the government study is critical of our findings. It was not, in our view. Instead, the authors of that study tried to explain the differences between their estimates and ours. Indeed, a statistical examination by us of their state-by-state estimation results against our own indicated the two sets of estimates are 63 percent positively correlated.

Even on its own, insinuation of bias in our work by reporters is troubling, but the larger work by these reporters suggested that the Mackinac Center is part of some tobacco corporation-funded conspiracy to harm public health by thwarting tax hikes on cigarettes, among other charges.

In fact, our model represents a simple investigation into the correlation between excise tax rates on cigarettes and related tax avoidance and evasion. The very fact that cigarette smuggling is widespread is confirmed by the government report The Guardian strategically quotes, as well as by nearly two dozen other studies, which you can read about here. The scholars who produced these studies come from a cross-section of government, consultancies and universities, plus a think tank.

The qualitative nature of the two dozen studies is consistent: Increases in cigarette taxes lead to more illicit consumption. The challenge we have is in determining the degree. The difficulty grows substantially when dealing with underground economies, as there are — by their very nature — no formal records of illicit trades. Economists quibble over estimates about how much consumption falls after a price increase, even when there is no illegal market to speak of. Surely, we would expect some disagreement from other scholars, too, when the illicit market is relevant to the problem of study.

All of this seems to have been lost, ignored or not even considered by The Guardian.

Our reports and essays have repeatedly acknowledged that both theory and evidence show that higher taxes can lead people to quit; the point is that just not as many do as tax hike proponents suggest. According to the evidence, smuggling and other consequences resulting from high cigarette taxes undermine the very health goals that many tax hike proponents believe will occur.

None of our research or rejoinders to criticism should lead our readers to believe we want to encourage smoking or discourage cessation. Neither of us smoke — as we have publicly stated for years — and would never encourage anyone to start. We just want to measure the response by smokers and others to excise tax rates (among other unintended consequences) so people and policy makers can make more informed decisions.

Regardless of our individual consumption habits, the Mackinac Center for Public Policy and other, state-based researchers deserved better than the treatment we were accorded at the hands of The Guardian.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.