The study looked at how different types of taxes on cigarettes affect prices, government revenues, and smoking rates in 21 EU countries from 1998 to 2007. They found that countries with more ad valorem tax have bigger price differences between premium and low-priced cigarettes. Increasing the ad valorem tax share by 10% raises the price gap by 4 to 5%. Unstable government revenues from cigarette taxes are linked to relying more on ad valorem tax, especially in markets with powerful manufacturers. Using a specific tax more heavily reduces smoking rates, but this effect weakens as manufacturers gain more market power.