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Cigarette Taxes and the Transition from Youth to Adult Smoking: Smoking Initiation, Cessation, and Participation

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  • Philip DeCicca
  • Donald S. Kenkel
  • Alan D. Mathios

Abstract

Policy makers continue to advocate and adopt cigarette taxes as a public health measure. Most previous individual-level empirical studies of cigarette demand are essentially static analyses. In this study, we use longitudinal data to examine the dynamics of young adults' decisions about smoking initiation and cessation. We develop a simple model to highlight the distinctions between smoking initiation, cessation, and participation and show that the price elasticity of smoking participation is a weighted average of corresponding initiation and cessation elasticities, a finding that applies more broadly to other addictive substances as well. The paper's remaining contributions are empirical. We use data from the 1992 wave of the National Education Longitudinal Study, when most of the cohort were high school seniors, and data from the 2000 wave, when they were about 26 years old. The results show that the distinction between initiation and cessation is empirically useful. We also contribute new estimates on the tax-responsiveness of young adult smoking, paying careful attention to the possibility of bias if hard-to-observe differences in anti-smoking sentiment are correlated with state cigarette taxes. We find no evidence that higher taxes prevent smoking initiation, but some evidence that higher taxes are associated with increased cessation.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14042.

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Date of creation: May 2008
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Publication status: published as DeCicca, Philip & Kenkel, Don & Mathios, Alan, 2008. "Cigarette taxes and the transition from youth to adult smoking: Smoking initiation, cessation, and participation," Journal of Health Economics, Elsevier, vol. 27(4), pages 904-917, July.
Handle: RePEc:nbr:nberwo:14042

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Cited by:
  1. Marti, Joachim, 2012. "A best–worst scaling survey of adolescents' level of concern for health and non-health consequences of smoking," Social Science & Medicine, Elsevier, Elsevier, vol. 75(1), pages 87-97.
  2. ÖZGÜR, Onur & BISIN, Alberto, 2011. "Dynamic Linear Economies with Social Interactions," Cahiers de recherche, Centre interuniversitaire de recherche en économie quantitative, CIREQ 04-2011, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  3. G. Guindon, 2014. "The impact of tobacco prices on smoking onset in Vietnam: duration analyses of retrospective data," The European Journal of Health Economics, Springer, Springer, vol. 15(1), pages 19-39, January.
  4. Don Kenkel & Dean R. Lillard & Feng Liu, 2009. "An analysis of life‐course smoking behavior in China," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages S147-S156, July.
  5. Donald Kenkel & Dean Lillard & Alan Mathios, 2006. "The Roles of High School Completion and GED Receipt in Smoking and Obesity," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 24(3), pages 635-660, July.
  6. Onur Ozgur & Alberto Bisin, 2011. "Dynamic linear economies with social interactions," Levine's Working Paper Archive 786969000000000036, David K. Levine.
  7. Tworek, Cindy & Yamaguchi, Ryoko & Kloska, Deborah D. & Emery, Sherry & Barker, Dianne C. & Giovino, Gary A. & O'Malley, Patrick M. & Chaloupka, Frank J., 2010. "State-level tobacco control policies and youth smoking cessation measures," Health Policy, Elsevier, Elsevier, vol. 97(2-3), pages 136-144, October.
  8. Line Bretteville-Jensen, Anne & Biørn, Erik & Selmer, Randi, 2011. "Quitting behaviour of cigarette smokers. Are there direct effects of a screening program?," Memorandum, Oslo University, Department of Economics 07/2011, Oslo University, Department of Economics.
  9. Lillard, Dean R. & Molloy, Eamon & Sfekas, Andrew, 2013. "Smoking initiation and the iron law of demand," Journal of Health Economics, Elsevier, Elsevier, vol. 32(1), pages 114-127.
  10. Hansen, Benjamin & Sabia, Joseph J. & Rees, Daniel I., 2011. "Cigarette Taxes and the Social Market," IZA Discussion Papers 5580, Institute for the Study of Labor (IZA).
  11. Wehby, George L. & Courtemanche, Charles J., 2012. "The heterogeneity of the cigarette price effect on body mass index," Journal of Health Economics, Elsevier, Elsevier, vol. 31(5), pages 719-729.
  12. Shantanu Bagchi & James Feigenbaum, 2014. "Is Smoking a Fiscal Good?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(1), pages 170-190, January.
  13. Jan Marcus, 2012. "Does Job Loss Make You Smoke and Gain Weight?," SOEPpapers on Multidisciplinary Panel Data Research 432, DIW Berlin, The German Socio-Economic Panel (SOEP).
  14. N Powdthavee & S Wu & A Oswald, 2010. "The Effects of Daughters on Health Choices and Risk Behaviour," Discussion Papers, Department of Economics, University of York 10/03, Department of Economics, University of York.
  15. Averett, Susan L. & Wang, Yang, 2012. "The Effects of EITC Payment Expansion on Maternal Smoking," IZA Discussion Papers 6680, Institute for the Study of Labor (IZA).
  16. Philip DeCicca & Donald S. Kenkel & Alan D. Mathios, 2008. "Cigarette Taxes and the Transition from Youth to Adult Smoking: Smoking Initiation, Cessation, and Participation," NBER Working Papers 14042, National Bureau of Economic Research, Inc.
  17. Michael T. Owyang & E. Katarina Vermann, 2012. "Where there’s a smoking ban, there’s still fire," Review, Federal Reserve Bank of St. Louis, issue July, pages 265-286.
  18. Donald S. Kenkel & Maximilian D. Schmeiser & Carly J. Urban, 2014. "Is Smoking Inferior? Evidence from Variation in the Earned Income Tax Credit," NBER Working Papers 20097, National Bureau of Economic Research, Inc.
  19. Nonnemaker, James M. & Farrelly, Matthew C., 2011. "Smoking initiation among youth: The role of cigarette excise taxes and prices by race/ethnicity and gender," Journal of Health Economics, Elsevier, Elsevier, vol. 30(3), pages 560-567, May.

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