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An empirical investigation of the social market for cigarettes


  • Brett Katzman

    (Kennesaw State University, USA)

  • Sara Markowitz

    (Rutgers University, Newark and National Bureau of Economic Research, NJ, USA)

  • Kerry Anne McGeary

    (Drexel University, USA)


A major characteristic of teenage smoking is the ability to 'bum' cigarettes from peers. To date, research into the determinants of teenage smoking has largely ignored the effects of this social market on the smoking decisions of teenagers. In this paper, we estimate the demand for cigarettes using data from the Youth Risk Behavior Survey which distinguishes teens who primarily buy cigarettes from those who primarily borrow cigarettes. Our results demonstrate the ways in which higher cigarette prices and restrictions on smoking influence not only a teen's decision to smoke and the quantity of cigarettes smoked, but also the manner in which cigarettes are acquired. We show that current cigarette regulations are ineffective in reaching the group of light smokers who primarily obtain cigarettes through the social market, thus indicating that alternative measures should be explored in an effort to reduce the number of smokers in the future. Copyright © 2007 John Wiley & Sons, Ltd.

Suggested Citation

  • 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.
  • Handle: RePEc:wly:hlthec:v:16:y:2007:i:10:p:1025-1039 DOI: 10.1002/hec.1215

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    References listed on IDEAS

    1. Lewit, Eugene M & Coate, Douglas & Grossman, Michael, 1981. "The Effects of Government Regulation on Teenage Smoking," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 545-569, December.
    2. Jonathan Gruber, 2000. "Youth Smoking in the U.S.: Prices and Policies," NBER Working Papers 7506, National Bureau of Economic Research, Inc.
    3. Martin Forster & Andrew M. Jones, "undated". "The role of tobacco taxes in starting and quitting smoking," Discussion Papers 00/51, Department of Economics, University of York.
    4. 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.
    5. Chaloupka, Frank J. & Warner, Kenneth E., 2000. "The economics of smoking," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 29, pages 1539-1627 Elsevier.
    6. Kent Smetters & Jennifer Gravelle, 2001. "The Exchange Theory of Teenage Smoking and the Counterproductiveness of Moderate Regulation," NBER Working Papers 8262, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Hansen, Benjamin & Sabia, Joseph J. & Rees, Daniel I., 2011. "Cigarette Taxes and the Social Market," IZA Discussion Papers 5580, Institute for the Study of Labor (IZA).
    2. Sara Markowitz & John Tauras, 2009. "Substance use among adolescent students with consideration of budget constraints," Review of Economics of the Household, Springer, vol. 7(4), pages 423-446, December.
    3. Ali Mir M., 2012. "Social Learning Theory, Cigarette Taxes and Adolescent Smoking Behavior," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 232(6), pages 633-651, December.
    4. D. Mark Anderson, 2013. "The Impact Of Hiv Education On Behavior Among Youths: A Propensity Score Matching Approach," Contemporary Economic Policy, Western Economic Association International, vol. 31(3), pages 503-527, July.
    5. Dhaval Dave & Bo Feng & Michael F. Pesko, 2017. "The Effects of E-Cigarette Minimum Legal Sale Age Laws on Youth Substance Use," NBER Working Papers 23313, National Bureau of Economic Research, Inc.
    6. Savage, Michael, 2017. "Do youth access control policies stop young people smoking? Evidence from Ireland," Papers WP572, Economic and Social Research Institute (ESRI).

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