Tobacco Use, Taxation and Self Control in Adolescence
AbstractRecent literature has suggested that higher taxes on addictive goods could increase welfare by assisting individuals with self control problems and trouble resisting 'temptation’. In contrast, if individuals continue to use despite increased prices, taxation may serve to reduce the welfare of these individuals while providing no benefits in managing self control nor mitigating externalities. We use data on adolescents from the National Longitudinal Study of Adolescent Health (Add Health) to examine the impact of tobacco taxes on smoking. To account for unobserved heterogeneity in response to taxes we estimate finite mixture models, positing two types of individuals with differential responses to taxes. We find evidence of differential price elasticity for tobacco use across the adolescents groups, and show that individuals with low self control or high discount rates are largely unresponsive to cigarette price. Those who have the least willpower may need the most help in quitting but are unresponsive to taxes, suggesting that policies other than taxation may be needed to reduce adolescent tobacco use.
Download InfoIf 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.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15130.
Date of creation: Jul 2009
Date of revision:
Note: AG HE
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
- I0 - Health, Education, and Welfare - - General
- I1 - Health, Education, and Welfare - - Health
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-11 (All new papers)
- NEP-HEA-2009-07-11 (Health Economics)
- NEP-PUB-2009-07-11 (Public Finance)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Ian Irvine & William Sims, 2012. "A Taxing Dilemma: Assessing the Impact of Tax and Price Changes on the Tobacco Market," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 350, May.
- Sofie Kragh Pedersen & Alexander K. Koch & Julia Nafziger, 2012. "Who wants paternalism?," Economics Working Papers 2012-22, School of Economics and Management, University of Aarhus.
- Odermatt, Reto & Stutzer, Alois, 2013.
"Smoking Bans, Cigarette Prices and Life Satisfaction,"
IZA Discussion Papers
7177, Institute for the Study of Labor (IZA).
- Reto Odermatt & Alois Stutzer, 2013. "Smoking Bans, Cigarette Prices and Life Satisfaction," Working papers 2013/07, Faculty of Business and Economics - University of Basel.
- 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, vol. 75(1), pages 87-97.
If references are entirely missing, you can add them using this form.