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The effect of a major cigarette price change on smoking behavior in california: a zero-inflated negative binomial model

Author

Listed:
  • Mei-ling Sheu

    (Taipei Medical University, Taiwan)

  • Teh-wei Hu

    (University of California, Berkeley, USA)

  • Theodore E. Keeler

    (University of California, Berkeley, USA)

  • Michael Ong

    (University of California, San Francisco, USA)

  • Hai-Yen Sung

    (University of California, San Francisco, USA)

Abstract

The objective of this paper is to determine the price sensitivity of smokers in their consumption of cigarettes, using evidence from a major increase in California cigarette prices due to Proposition 10 and the Tobacco Settlement. The study sample consists of individual survey data from Behavioral Risk Factor Survey (BRFS) and price data from the Bureau of Labor Statistics between 1996 and 1999. A zero-inflated negative binomial (ZINB) regression model was applied for the statistical analysis. The statistical model showed that price did not have an effect on reducing the estimated prevalence of smoking. However, it indicated that among smokers the price elasticity was at the level of −0.46 and statistically significant. Since smoking prevalence is significantly lower than it was a decade ago, price increases are becoming less effective as an inducement for hard-core smokers to quit, although they may respond by decreasing consumption. For those who only smoke occasionally (many of them being young adults) price increases alone may not be an effective inducement to quit smoking. Additional underlying behavioral factors need to be identified so that more effective anti-smoking strategies can be developed. Copyright © 2004 John Wiley & Sons, Ltd.

Suggested Citation

  • Mei-ling Sheu & Teh-wei Hu & Theodore E. Keeler & Michael Ong & Hai-Yen Sung, 2004. "The effect of a major cigarette price change on smoking behavior in california: a zero-inflated negative binomial model," Health Economics, John Wiley & Sons, Ltd., vol. 13(8), pages 781-791.
  • Handle: RePEc:wly:hlthec:v:13:y:2004:i:8:p:781-791
    DOI: 10.1002/hec.849
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    References listed on IDEAS

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    2. Reiner Hanewinkel & Christian Radden & Tobias Rosenkranz, 2008. "Price increase causes fewer sales of factory-made cigarettes and higher sales of cheaper loose tobacco in Germany," Health Economics, John Wiley & Sons, Ltd., vol. 17(6), pages 683-693.
    3. Nazmi Sari, 2009. "Physical inactivity and its impact on healthcare utilization," Health Economics, John Wiley & Sons, Ltd., vol. 18(8), pages 885-901.
    4. Sun, Cong & Kahn, Matthew E. & Zheng, Siqi, 2017. "Self-protection investment exacerbates air pollution exposure inequality in urban China," Ecological Economics, Elsevier, vol. 131(C), pages 468-474.
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    6. repec:exp:econcs:v:5:y:2017:i:2:p:62-70 is not listed on IDEAS
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    9. Seonghoon Hong & Alan R. Collins, 2010. "The Impact Of Antismoking Policies In Korea On Quit Success And Smoking Intentions," Contemporary Economic Policy, Western Economic Association International, vol. 28(4), pages 474-487, October.
    10. Nazmi Sari, 2014. "Sports, Exercise, And Length Of Stay In Hospitals: Is There A Differential Effect For The Chronically Ill People?," Contemporary Economic Policy, Western Economic Association International, vol. 32(2), pages 247-260, April.
    11. repec:spr:agfoec:v:5:y:2017:i:1:d:10.1186_s40100-017-0082-0 is not listed on IDEAS
    12. Zhen Xu & G. Cornelis van Kooten, 2013. "Count Models and Wildfire in British Columbia," Working Papers 2013-06, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
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    15. Timothy T. Brown & Richard M. Scheffler & Sukyong Seo & Mary Reed, 2006. "The empirical relationship between community social capital and the demand for cigarettes," Health Economics, John Wiley & Sons, Ltd., vol. 15(11), pages 1159-1172.
    16. Woojin Chung & Hanjoong Kim & Seungji Lim & Sunmi Lee & Kyungsook Cho, 2009. "Factors influencing cigarette smoking and quantified implications for anti-smoking policy: evidence from South Korea," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 54(6), pages 409-419, December.
    17. Chung, Woojin & Lim, Seungji & Lee, Sunmi, 2010. "Factors influencing gender differences in smoking and their separate contributions: Evidence from South Korea," Social Science & Medicine, Elsevier, vol. 70(12), pages 1966-1973, June.
    18. Abdulbaki Bilgic & Wojciech Florkowski & Cuma Akbay, 2010. "Demand for cigarettes in Turkey: an application of count data models," Empirical Economics, Springer, vol. 39(3), pages 733-765, December.
    19. Williams, Ryan Blake, 2012. "The External Costs Of Wind Farm Development On the High Plains: Are Developers Making An Effort To Minimize These Costs?," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119821, Southern Agricultural Economics Association.

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