Is the transposition of EU directives homogeneous? An AI counterfactual example

This research investigates homogeneity in the transposition of European Directives using as an example the EU policy on tobaccos regulated by Directive 2011/64. We analyse the effect of excise duties on tobacco consumption in Europe from 2002 to 2017 using an Artificial Intelligence counterfactual strategy. To our knowledge, this the first time that this AI strategie has been used in the economic analysis of law. Our results show that countries have different responses to changes in prices or taxation on tobacco. The lack of homogeneity across countries creates distortions and frontier effects and shows the need of harmonization.