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Estimating the impacts of cigarette taxes on youth smoking participation, initiation, and persistence: empirical evidence from Canada

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  • Anindya Sen

    (Department of Economics, University of Waterloo, Waterloo, Ont., Canada)

  • Tony Wirjanto

    (Department of Economics, University of Waterloo, Waterloo, Ont., Canada)

Abstract

In response to the widespread availability of illegal contraband, the federal and five provincial governments in Canada implemented a 40-60% reduction to cigarette excise taxes in February 1994. We exploit this unique and discrete policy shock by estimating the effects of cigarette taxes on youth smoking with data from the 1992-1996 Waterloo Smoking Prevention Program, 1991 General Social Survey, 1994 Youth Smoking Survey, 1996-1997 and 1998-1999 National population Health Surveys, and the 1999 Canadian Tobacco Use Monitoring Survey. Empirical estimates yield daily and occasional participation elasticities from −0.10 to −0.14, which is consistent with findings from recent U.S.-based research. A key contribution of this research is in the analysis of lower taxes on a panel of 591 youths from the Waterloo Smoking Prevention Program, who did not smoke in 1993, but 43% of whom confirm smoking participation following the tax reduction. Employing these data reveals elasticities from −0.2 to −0.5, which suggest that even significant and discrete changes in taxes might have limited impacts on the initiation and persistence of youth smoking. Copyright © 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • Anindya Sen & Tony Wirjanto, 2010. "Estimating the impacts of cigarette taxes on youth smoking participation, initiation, and persistence: empirical evidence from Canada," Health Economics, John Wiley & Sons, Ltd., vol. 19(11), pages 1264-1280.
  • Handle: RePEc:wly:hlthec:v:19:y:2010:i:11:p:1264-1280
    DOI: 10.1002/hec.1548
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    References listed on IDEAS

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    Cited by:

    1. Latif, Ehsan, 2014. "The impact of recession on drinking and smoking behaviours in Canada," Economic Modelling, Elsevier, vol. 42(C), pages 43-56.
    2. Sen Anindya & Ariizumi Hideki & Driambe Daciana, 2010. "Do Changes In Cigarette Taxes Impact Youth Smoking? Evidence from Canadian Provinces," Forum for Health Economics & Policy, De Gruyter, vol. 13(2), pages 1-25, August.
    3. Don Kenkel, 2012. "Health Behaviours Among Young People," Chapters,in: The Elgar Companion to Health Economics, Second Edition, chapter 6 Edward Elgar Publishing.
    4. Auld M. Christopher & Zarrabi Mahmood, 2015. "Long-Term Effects of Tobacco Prices Faced by Adolescents," Forum for Health Economics & Policy, De Gruyter, vol. 18(1), pages 1-24, January.
    5. Di Novi, Cinzia & Jacobs, Rowena & Migheli, Matteo, 2018. "Smoking Inequality across Genders and Socio-economic Classes. Evidence from Longitudinal Italian Data," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201802, University of Turin.
    6. Marti, Joachim, 2012. "A best–worst scaling survey of adolescents' level of concern for health and non-health consequences of smoking," Social Science & Medicine, Elsevier, vol. 75(1), pages 87-97.
    7. Cinzi Di Novi & Rowena Jacobs & Matteo Migheli, 2018. "Smoking Inequality across Genders and Socio-economic Classes. Evidence from Longitudinal Italian Data," DEM Working Papers Series 152, University of Pavia, Department of Economics and Management.
    8. Gerking, S.D. & Khaddaria, R., 2012. "Perceptions of health risk and smoking decisions of young people," Other publications TiSEM 2e129465-1e69-4454-83d7-7, Tilburg University, School of Economics and Management.

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