The Intergenerational Consequences of Tobacco Policy

Tobacco policy has long been used to incentivize healthy behavior. Pregnant women are a group of particular interest due to their unique position to pass health capital down to the next generation. We create a resource for economists, policy analysts, and public health professionals by critically reviewing and synthesizing the findings from relevant papers on this topic. We first evaluate the use of cigarette taxes as a natural experiment and discuss the econometric models typically employed. By carefully comparing estimates across papers we highlight several interesting findings; most notably, while pregnant women are responsive to taxes and taxes improve child health, their responsiveness has declined over time. We show that these trends are consistent with a change in the composition of smoking mothers; specifically, the least addicted smokers quit in the 1990s, leaving the pool of smoking mothers to be dominated by less price elastic smokers in the 2000s. We then turn to reviewing other tobacco policies with a focus on clean indoor air laws. Among other things, we show that the effect of a state-level U.S. ban is roughly three times the effect of a 10% increase in prices using elasticity estimates from more recent periods. Throughout this review, we identify areas for improvement in the literature and offer a number of ideas for promising future research projects.