Advanced Search
MyIDEAS: Login

Putting Out The Fires: Will Higher Taxes Reduce Youth Smoking?

Contents:

Author Info

  • DeCicca, Philip

    (Department of Policy Analysis & Management)

  • Kenkel, Donald

    () (Department of Policy Analysis & Management)

  • Mathios, Alan

    () (Department of Policy Analysis & Management)

Abstract

This paper re-examines the empirical support for predictions that proposed cigarette tax or price increases will substantially reduce youth smoking. Part of the support for these predictions comes from evidence that higher taxes reduce aggregate tobacco sales and adult smoking rates. But taxes may have much different impacts on youth starting behavior than on adult quitting behavior. We use a panel microdata set, the National Education Longitudinal Survey of 1988 (NELS:88), that spans a period when many states increased taxes on cigarettes.We are able to study the impact of taxes and prices on smoking behavior during exactly the period in adolescence when most smokers start their habits. Cross-sectional models of 12th grade smoking based on the NELS:88 data yield estimated price elasticities ranging from -0.29 to -0.98,similar to previous studies. But when we exploit the longitudinal nature of the data our results suggest that cigarette taxes or prices are not important determinants of smoking initiation. We find weak or nonexistent tax and price effects in models of the onset of smoking between 8th and 12th grade, models of the onset into heavy smoking between 8th and 12th grade, and discrete time hazard models that include state fixed effects. Our estimates create doubt about the strength of the response of youth smoking to higher taxes or prices, and suggest that alternative policy approaches to preventing youth smoking deserve serious attention. We also provide a new perspective on the relationship between smoking and schooling. We find that students with better tests scores are less likely to smoke, and that eventual dropouts are already more likely to smoke in 8th grade. Possible explanations for these patterns include individual heterogeneity in: the rate of time preference; tastes for deviancy; parental investment in smoking prevention as an aspect of child quality; and optimal lifetime plans for health and education human capital investment.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.hha.dk/nat/WPER/00-3.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 00-3.

as in new window
Length: 46 pages
Date of creation: 01 Jan 2000
Date of revision:
Handle: RePEc:hhs:aareco:2000_003

Contact details of provider:
Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
More information through EDIRC

Related research

Keywords: Cigarette smoking; taxation;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Deirdre N. McCloskey & Stephen T. Ziliak, 1996. "The Standard Error of Regressions," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 97-114, March.
  2. Saba, Richard P, et al, 1995. "The Demand for Cigarette Smuggling," Economic Inquiry, Western Economic Association International, vol. 33(2), pages 189-202, April.
  3. William N. Evans & Matthew C. Farrelly, 1998. "The Compensating Behavior of Smokers: Taxes, Tar, and Nicotine," RAND Journal of Economics, The RAND Corporation, vol. 29(3), pages 578-595, Autumn.
  4. Lewit, Eugene M & Coate, Douglas & Grossman, Michael, 1981. "The Effects of Government Regulation on Teenage Smoking," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 545-69, December.
  5. Frank J. Chaloupka, 1991. "Rational Addictive Behavior and Cigarette Smoking," NBER Working Papers 3268, National Bureau of Economic Research, Inc.
  6. Becker, Gary S & Grossman, Michael & Murphy, Kevin M, 1994. "An Empirical Analysis of Cigarette Addiction," American Economic Review, American Economic Association, vol. 84(3), pages 396-418, June.
  7. Hai-Yen Sung & Teh-Wei Hu & Theodore E. Keeler, 1994. "Cigarette Taxation And Demand: An Empirical Model," Contemporary Economic Policy, Western Economic Association International, vol. 12(3), pages 91-100, 07.
  8. Frank J. Chaloupka & Henry Wechsler, 1995. "Price, Tobacco Control Policies and Smoking Among Young Adults," NBER Working Papers 5012, National Bureau of Economic Research, Inc.
  9. Willard G. Manning Jr. & Charles E. Phelps, 1979. "The Demand for Dental Care," Bell Journal of Economics, The RAND Corporation, vol. 10(2), pages 503-525, Autumn.
  10. Kenkel, D.S., 1988. "Health Behavior, Health Knowledge, And Schooling," Papers 10-88-3, Pennsylvania State - Department of Economics.
  11. Gary S. Becker & Kevin M. Murphy, 1986. "A Theory of Rational Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 41, Chicago - Center for Study of Economy and State.
  12. Farrell, Phillip & Fuchs, Victor R. & Fuchs, Victor R., 1982. "Schooling and health : The cigarette connection," Journal of Health Economics, Elsevier, vol. 1(3), pages 217-230, December.
  13. John A. Tauras & Frank J. Chaloupka, 1999. "Price, Clean Indoor Air, and Cigarette Smoking: Evidence from the Longitudinal Data for Young Adults," NBER Working Papers 6937, National Bureau of Economic Research, Inc.
  14. Frank J. Chaloupka & Michael Grossman, 1996. "Price, Tobacco Control Policies and Youth Smoking," NBER Working Papers 5740, National Bureau of Economic Research, Inc.
  15. Keeler, Theodore E. & Hu, Teh-wei & Barnett, Paul G. & Manning, Willard G. & Sung, Hai-Yen, 1996. "Do cigarette producers price-discriminate by state? An empirical analysis of local cigarette pricing and taxation," Journal of Health Economics, Elsevier, vol. 15(4), pages 499-512, August.
  16. Stewart, Mark B, 1983. "On Least Squares Estimation When the Dependent Variable Is Grouped," Review of Economic Studies, Wiley Blackwell, vol. 50(4), pages 737-53, October.
  17. Lewit, Eugene M. & Coate, Douglas, 1982. "The potential for using excise taxes to reduce smoking," Journal of Health Economics, Elsevier, vol. 1(2), pages 121-145, August.
  18. Gary S.Grossman Becker & Michael Murphy & Kevin M., 1991. "Rational Addiction and the Effect of Price on Consumption," University of Chicago - George G. Stigler Center for Study of Economy and State 68, Chicago - Center for Study of Economy and State.
  19. Frank J. Chaloupka & Rosalie Liccardo Pacula, 1998. "An Examination of Gender and Race Differences in Youth Smoking Responsiveness to Price and Tobacco Control Policies," NBER Working Papers 6541, National Bureau of Economic Research, Inc.
  20. Barnett, Paul G. & Keeler, Theodore E. & Hu, Teh-wei, 1995. "Oligopoly structure and the incidence of cigarette excise taxes," Journal of Public Economics, Elsevier, vol. 57(3), pages 457-470, July.
  21. Douglas, Stratford, 1998. "The Duration of the Smoking Habit," Economic Inquiry, Western Economic Association International, vol. 36(1), pages 49-64, January.
  22. Douglas, Stratford & Hariharan, Govind, 1994. "The hazard of starting smoking: Estimates from a split population duration model," Journal of Health Economics, Elsevier, vol. 13(2), pages 213-230, July.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Erdal Tekin & Naci Mocan & Lan Liang, 2009. "Do Adolescents with Emotional or Behavioral Problems Respond to Cigarette Prices?," Southern Economic Journal, Southern Economic Association, vol. 76(1), pages 67-85, July.
  2. David M. Cutler & Jonathan Gruber & Raymond S. Hartman & M.B. Landrum, J. Newhouse & Meredith B. Rosenthal, 2000. "The Economic Impacts of the Tobacco Settlement," NBER Working Papers 7760, National Bureau of Economic Research, Inc.
  3. John A. Tauras & Patrick M. O'Malley & Lloyd D. Johnston, 2001. "Effects of Price and Access Laws on Teenage Smoking Initiation: A National Longitudinal Analysis," NBER Working Papers 8331, National Bureau of Economic Research, Inc.
  4. Jonathan Gruber, 2000. "Youth Smoking in the U.S.: Prices and Policies," NBER Working Papers 7506, National Bureau of Economic Research, Inc.
  5. John Cawley & Sara Markowitz & John Tauras, 2006. "Obesity, Cigarette Prices, Youth Access Laws, and Adolescent Smoking Initiation," Eastern Economic Journal, Eastern Economic Association, vol. 32(1), pages 149-170, Winter.
  6. Jonathan Gruber, 2001. "Tobacco at the Crossroads: The Past and Future of Smoking Regulation in the United States," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 193-212, Spring.
  7. John A. Tauras, 1999. "The Transition to Smoking Cessation: Evidence from Multiple Failure Duration Analysis," NBER Working Papers 7412, National Bureau of Economic Research, Inc.
  8. José Ferraz Nunes, 2008. "Health, Social Insurance and Income," International Advances in Economic Research, Springer, vol. 14(3), pages 329-335, August.
  9. Cawley, John & Markowitz, Sara & Tauras, John, 2004. "Lighting up and slimming down: the effects of body weight and cigarette prices on adolescent smoking initiation," Journal of Health Economics, Elsevier, vol. 23(2), pages 293-311, March.
  10. Ross, Hana PhD & Chaloupka, Frank J. PhD & Wakefield, Melanie PhD, 2003. "Youth Smoking Uptake Progress: Price and Public Policy Effects," University of California at San Francisco, Center for Tobacco Control Research and Education qt59d1z56k, Center for Tobacco Control Research and Education, UC San Francisco.
  11. Silja Göhlmann & Christoph M. Schmidt & Harald Tauchmann, 2010. "Smoking initiation in Germany: the role of intergenerational transmission," Health Economics, John Wiley & Sons, Ltd., vol. 19(2), pages 227-242.
  12. Silja Göhlmann, 2007. "The Determinants of Smoking Initiation - Empirical Evidence for Germany," Ruhr Economic Papers 0027, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  13. Silja Göhlmann, 2007. "The Determinants of Smoking Initiation: Empirical Evidence for Germany," SOEPpapers on Multidisciplinary Panel Data Research 62, DIW Berlin, The German Socio-Economic Panel (SOEP).
  14. Bulow, Jeremy I & Klemperer, Paul, 1999. "The Tobacco Deal," CEPR Discussion Papers 2125, C.E.P.R. Discussion Papers.
  15. Layte, Richard & Russell, Helen & McCoy, Selina, 2002. "The Economics and Marketing of Tobacco: An Overview of the Existing Published Evidence," Research Series, Economic and Social Research Institute (ESRI), number PRS46.
  16. Jonathan Gruber & Jonathan Zinman, 2001. "Youth Smoking in the United States: Evidence and Implications," NBER Chapters, in: Risky Behavior among Youths: An Economic Analysis, pages 69-120 National Bureau of Economic Research, Inc.
  17. Jeffrey E. Harris & Sandra W. Chan, 1999. "The continuum-of-addiction: cigarette smoking in relation to price among Americans aged 15-29," Health Economics, John Wiley & Sons, Ltd., vol. 8(1), pages 81-86.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hhs:aareco:2000_003

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helle Vinbaek Stenholt).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.