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The role of tobacco taxes in starting and quitting smoking

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Author Info
Martin Forster
Andrew M. Jones

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Abstract

The annual five per cent in real terms increase in tobacco taxes proposed in the recent White Paper on smoking has reaffirmed the commitment of successive United Kingdom governments to above inflation increases in tobacco taxation to encourage people to stop smoking. This paper presents evidence on the determinants of starting and quitting smoking using data from the British 'Health and Lifestyle Survey' and is the first to identify tax elasticities for starting and quitting smoking using British data. Self-reported individual smoking histories are coupled with a long time series for the tax rate on cigarettes to construct a longitudinal data set. Estimates are obtained for the impact of above inflation tax rises on the age of starting smoking and the number of years of smoking. The estimates of the tax elasticity of the age of starting smoking are +0.16 for men and +0.08 for women. The estimates of the tax elasticity of quitting are - 0.60 for men and -0.46 for women. These are robust to different specifications.

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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 00/51.

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Handle: RePEc:yor:yorken:00/51

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Keywords: Smoking initiation and cessation; Tobacco taxes; Duration analysis.;

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This paper has been announced in the following NEP Reports: 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.:
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  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. [Downloadable!] (restricted)
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    Other versions:
  5. Douglas, Stratford, 1998. "The Duration of the Smoking Habit," Economic Inquiry, Oxford University Press, vol. 36(1), pages 49-64, January.
  6. Peter Schmidt & Ann Dryden Witte, 1989. "Predicting Criminal Recidivism Using "Split Population" Survival Time Models," NBER Working Papers 2445, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Torelli, Nicola & Trivellato, Ugo, 1993. "Modelling inaccuracies in job-search duration data," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 187-211, September. [Downloadable!] (restricted)
  8. Frank J. Chaloupka, 1991. "Rational Addictive Behavior and Cigarette Smoking," NBER Working Papers 3268, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Sander, William, 1995. "Schooling and Quitting Smoking," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 191-99, February. [Downloadable!] (restricted)
  10. Chaloupka, Frank J. & Wechsler, Henry, 1997. "Price, tobacco control policies and smoking among young adults," Journal of Health Economics, Elsevier, vol. 16(3), pages 359-373, June. [Downloadable!] (restricted)
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  11. Tunali, Insan & Pritchett, Jonathan B, 1997. "Cox Regression with Alternative Concepts of Waiting Time: The New Orleans Yellow Fever Epidemic of 1853," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(1), pages 1-25, Jan.-Feb.. [Downloadable!]
  12. Jones, Andrew M., 1994. "Health, addiction, social interaction and the decision to quit smoking," Journal of Health Economics, Elsevier, vol. 13(1), pages 93-110, March. [Downloadable!] (restricted)
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  14. Frank J. Chaloupka & Michael Grossman, 1996. "Price, Tobacco Control Policies and Youth Smoking," NBER Working Papers 5740, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. 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. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, 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.)

  1. Hammar, Henrik & Carlsson, Fredrik, 2001. "Smokers' Decisions To Quit Smoking," Working Papers in Economics 59, Göteborg University, Department of Economics. [Downloadable!]
  2. David Madden, 2002. "Do Tobacco Taxes Influence Starting and Quitting Smoking? A Duration Analysis Approach Using Evidence from a Sample of Irish Women," Working Papers 200206, School Of Economics, University College Dublin. [Downloadable!]
  3. Andrew Clark & Fabrice Etilé, 2001. "Do Health Changes Affect Smoking? Evidence from British Panel Data," DELTA Working Papers 2001-16, DELTA (Ecole normale supérieure). [Downloadable!]
    Other versions:
  4. Ours, Jan C. van & Williams, Jenny, 2005. "Cannabis proces and dynamics of cannabis use," Discussion Paper 52, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  5. Ángel López Nicolás, 2001. "How Important are Tobacco Prices in the Propensity to Start and Quit Smoking? An Analysis of Smoking Histories from the Spanish National Health Survey," Economics Working Papers 548, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
  6. Jan C. van Ours, 2006. "Dynamics in the use of drugs," Health Economics, John Wiley & Sons, Ltd., vol. 15(12), pages 1283-1294. [Downloadable!]
  7. Ours, Jan C. van, 2005. "Dynamics in the use of drugs," Discussion Paper 21, Tilburg University, Center for Economic Research. [Downloadable!]
  8. John Cawley & Sara Markowitz & John Tauras, 2003. "Lighting Up and Slimming Down: The Effects of Body Weight and Cigarette Prices on Adolescent Smoking Initiation," NBER Working Papers 9561, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  9. Hammar, Henrik & Martinsson, Peter, 2001. "The Effect Of Cigarette Prices And Antismoking Policies On The Age Of Smoking Initiation," Working Papers in Economics 62, Göteborg University, Department of Economics. [Downloadable!]
  10. Anne Bretteville-Jensen, 2006. "Drug Demand – Initiation, Continuation and Quitting," De Economist, Springer, vol. 154(4), pages 491-516, December. [Downloadable!] (restricted)
  11. Ángel López Nicolás, 2001. "How Important are Tobacco Prices in the Propensity to Start and Quit Smoking? An Analysis of Smoking Histories from the Spanish National Health Survey," Working Papers, Research Center on Health and Economics 548, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
  12. Martyn Duffy, 2006. "Tobacco consumption and policy in the United Kingdom," Applied Economics, Taylor and Francis Journals, vol. 38(11), pages 1235-1257, June. [Downloadable!] (restricted)
  13. Schneider, Udo & Zerth, Jürgen, 2008. "Improving prevention compliance through appropriate incentives," MPRA Paper 8280, University Library of Munich, Germany. [Downloadable!]
  14. 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. [Downloadable!]
  15. 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. [Downloadable!] (restricted)
  16. Brett Katzman & Sara Markowitz & Kerry Anne McGeary, 2007. "An empirical investigation of the social market for cigarettes," Health Economics, John Wiley & Sons, Ltd., vol. 16(10), pages 1025-1039. [Downloadable!]
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