Part of the variation across countries reflects differences in the timing of the smoking epidemic: men in the United Kingdom and the United States adopted smoking earlier and have since exhibited declines, whereas the smoking epidemic hit other countries (e.g., Japan, Spain, Italy) much later (see Table 5-1)
Similarly, the model will systematically over-predict actual sales for high-tax states (negative residual), as in-state residents choose to purchase cigarettes in nearby lower-tax states, from Indian reservations or military bases, or from illegal markets
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