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Smoking initiation and the iron law of demand

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  • Lillard, Dean R.
  • Molloy, Eamon
  • Sfekas, Andrew

Abstract

We show, with three longitudinal datasets, that cigarette taxes and prices affect smoking initiation decisions. Evidence from longitudinal studies is mixed but generally find that initiation does not vary with price or tax. We show that the lack of statistical significance partly results because of limited policy variation in the time periods studied, truncated behavioral windows, or mis-assignment of price and tax rates in retrospective data (which occurs when one has no information about respondents’ prior state or region of residence). Our findings highlight issues relevant to initiation behavior generally, particularly those for which individuals’ responses to policy changes may be noisy or small in magnitude.

Suggested Citation

  • Lillard, Dean R. & Molloy, Eamon & Sfekas, Andrew, 2013. "Smoking initiation and the iron law of demand," Journal of Health Economics, Elsevier, vol. 32(1), pages 114-127.
  • Handle: RePEc:eee:jhecon:v:32:y:2013:i:1:p:114-127
    DOI: 10.1016/j.jhealeco.2012.08.006
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    References listed on IDEAS

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    Cited by:

    1. repec:ucp:amjhec:v:3:y:2017:i:4:p:507-527 is not listed on IDEAS
    2. Friedman, Abigail S., 2015. "How does electronic cigarette access affect adolescent smoking?," Journal of Health Economics, Elsevier, vol. 44(C), pages 300-308.
    3. Nicolas R. Ziebarth & Gert G. Wagner, 2013. "Top-down v. Bottom-up: The Long-Term Impact of Government Ideology and Personal Experience on Values," Discussion Papers of DIW Berlin 1280, DIW Berlin, German Institute for Economic Research.
    4. Jan (J.C.) van Ours & Ali Palali, 2017. "The Impact of Tobacco Control Policies on Smoking Initiation in Europe," Tinbergen Institute Discussion Papers 17-074/V, Tinbergen Institute.
    5. repec:tpr:amjhec:v:3:y:2017:i:4:p:528-549 is not listed on IDEAS
    6. Benjamin Hansen & Daniel I. Rees & Joseph J. Sabia, 2013. "Cigarette Taxes and How Youths Obtain Cigarettes," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(2), pages 371-394, June.
    7. repec:wly:hlthec:v:27:y:2018:i:11:p:1738-1753 is not listed on IDEAS
    8. Williams, Jenny & Pacula, Rosalie Liccardo & Smart, Rosanna, 2019. "De Facto or De Jure? Ethnic Differences in Quit Responses to Legal Protections of Medical Marijuana Dispensaries," IZA Discussion Papers 12114, Institute of Labor Economics (IZA).
    9. Palali, Ali & van Ours, Jan C., 2017. "The Impact of Tobacco Control Policies on Smoking Initiation in Europe," CEPR Discussion Papers 12201, C.E.P.R. Discussion Papers.
    10. repec:ucp:amjhec:v:3:y:2017:i:4:p:528-549 is not listed on IDEAS
    11. Ali Palali & Jan C. Ours, 2019. "The impact of tobacco control policies on smoking initiation in eleven European countries," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(9), pages 1287-1301, December.
    12. repec:tpr:amjhec:v:3:y:2017:i:1:p:60-75 is not listed on IDEAS
    13. Michael Kvasnicka & Thomas Siedler & Nicolas R. Ziebarth, 2018. "The health effects of smoking bans: Evidence from German hospitalization data," Health Economics, John Wiley & Sons, Ltd., vol. 27(11), pages 1738-1753, November.
    14. repec:tpr:amjhec:v:3:y:2017:i:4:p:507-527 is not listed on IDEAS
    15. Christopoulou, Rebekka & Lillard, Dean R., 2015. "Is smoking behavior culturally determined? Evidence from British immigrants," Journal of Economic Behavior & Organization, Elsevier, vol. 110(C), pages 78-90.
    16. Meier, Armando N. & Odermatt, Reto & Stutzer, Alois, 2019. "Tobacco Sales Prohibition and Teen Smoking," IZA Discussion Papers 12231, Institute of Labor Economics (IZA).
    17. Deliana Kostova & Frank Chaloupka & Ce Shang, 2015. "A duration analysis of the role of cigarette prices on smoking initiation and cessation in developing countries," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(3), pages 279-288, April.

    More about this item

    Keywords

    Smoking initiation; Cigarette price elasticity; Cigarette tax elasticity; Chronological behavioral windows; Measurement error;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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