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Price, Clean Indoor Air, and Cigarette Smoking: Evidence from the Longitudinal Data for Young Adults

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  • John A. Tauras
  • Frank J. Chaloupka

Abstract

The upward trend in cigarette smoking among teenagers throughout the 1990's has spurred a great deal of interest on how to discourage young people from smoking. This paper attempts to inform policy makers by providing evidence on the effects cigarette prices (which can be increased through cigarette excise taxes) and restrictions on smoking in public places and private worksites have on the use of cigarettes by young adults. Data on cigarette use are taken from the 1976 through 1993 surveys of high school seniors as part of the Monitoring the Future program. Seven follow-ups are conducted on each senior class and therefore each individual is sampled up to eight times. Site-specific data on cigarette prices and clean indoor air laws are added to the survey data. Individual fixed effects methods are used to estimate smoking participation and conditional demand equations. The results indicate that increases in cigarette prices would lead to significant reductions in both the number of people smoking and the frequency with which individuals smoke. The estimated overall average price elasticity of demand is -0.791. In addition, restrictions on smoking in public places and private worksites are found to be effective in reducing both the intensity and the propensity to smoke.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6937.

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Date of creation: Feb 1999
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Handle: RePEc:nbr:nberwo:6937

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  1. 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.
  2. Eugene M. Lewit & Douglas Coate & Michael Grossman, 1981. "The Effects of Government Regulation on Teenage Smoking," NBER Working Papers 0655, National Bureau of Economic Research, Inc.
  3. Frank J. Chaloupka & Michael Grossman, 1996. "Price, Tobacco Control Policies and Youth Smoking," NBER Working Papers 5740, National Bureau of Economic Research, Inc.
  4. Frank J. Chaloupka, 1990. "Men, Women, and Addiction: The Case of Cigarette Smoking," NBER Working Papers 3267, National Bureau of Economic Research, Inc.
  5. Eugene M. Lewit & Douglas Coate, 1981. "The Potential for Using Excise Taxes to Reduce Smoking," NBER Working Papers 0764, National Bureau of Economic Research, Inc.
  6. Wasserman, Jeffrey & Manning, Willard G. & Newhouse, Joseph P. & Winkler, John D., 1991. "The effects of excise taxes and regulations on cigarette smoking," Journal of Health Economics, Elsevier, vol. 10(1), pages 43-64, May.
  7. 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.
  8. Frank J. Chaloupka, 1990. "Rational Addictive Behavior and Cigarette Smoking," NBER Working Papers 3268, National Bureau of Economic Research, Inc.
  9. Frank J. Chaloupka & Henry Saffer, 1992. "Clean Indoor Air Laws And The Demand For Cigarettes," Contemporary Economic Policy, Western Economic Association International, vol. 10(2), pages 72-83, 04.
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Citations

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Cited by:
  1. Decicca, P. & Kenkel, D. & Mathios, A., 2000. "Putting Out the Fires: Will Higher Taxes Reduce Youth Smoking," Papers 00-3, Aarhus School of Business - Department of Economics.
  2. Farrelly, Matthew C. & Bray, Jeremy W. & Zarkin, Gary A. & Wendling, Brett W., 2001. "The joint demand for cigarettes and marijuana: evidence from the National Household Surveys on Drug Abuse," Journal of Health Economics, Elsevier, vol. 20(1), pages 51-68, January.
  3. Inas Rashad, 2006. "Structural Estimation of Caloric Intake, Exercise, Smoking, and Obesity," NBER Working Papers 11957, National Bureau of Economic Research, Inc.
  4. John A. Tauras & Frank J. Chaloupka, 1999. "Determinants of Smoking Cessation: An Analysis of Young Adult Men and Women," NBER Working Papers 7262, National Bureau of Economic Research, Inc.
  5. Powell, Lisa M. & Tauras, John A. & Ross, Hana, 2005. "The importance of peer effects, cigarette prices and tobacco control policies for youth smoking behavior," Journal of Health Economics, Elsevier, vol. 24(5), pages 950-968, September.

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