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The impact of the master settlement agreement on cigarette consumption

  • Frank A. Sloan

    (Duke University)

  • Justin G. Trogdon

    (University of Adelaide, Australia)

In 1998, 46 states and the four major tobacco companies signed the Master Settlement Agreement (MSA), which stipulated that the tobacco companies pay states $206 billion over 25 years and take steps to reduce youth smoking. The remaining states settled separately. We sought to determine the effect of the settlements on demand for cigarettes. Using a nationwide sample from 1990 to 2002, we estimated a model of the decision to smoke cigarettes. The settlements affected smoking primarily through price increases for cigarettes, although there was evidence that other policy instruments influenced smoking rates for younger smokers. By 2002, the settlements had reduced overall smoking rates by 13 percent for ages 18 to 20 and older than 65 and 5 percent for ages 21 to 64. © 2004 by the Association for Public Policy Analysis and Management.

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File URL: http://hdl.handle.net/10.1002/pam.20050
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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

Volume (Year): 23 (2004)
Issue (Month): 4 ()
Pages: 843-855

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Handle: RePEc:wly:jpamgt:v:23:y:2004:i:4:p:843-855
Contact details of provider: Web page: http://www3.interscience.wiley.com/journal/34787/home

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  1. Gary S. Becker & Kevin M. Murphy, 1986. "A Theory of Rational Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 41, Chicago - Center for Study of Economy and State.
  2. Frank J. Chaloupka & Kenneth E. Warner, 1999. "The Economics of Smoking," NBER Working Papers 7047, National Bureau of Economic Research, Inc.
  3. Czart, Christina PhD & Pacula, Rosalie Liccardo PhD & Chaloupka, Frank J. PhD & Weschsler, Henry PhD, 2001. "The Impact of Prices and Control Policies on Cigarette Smoking among College Students," University of California at San Francisco, Center for Tobacco Control Research and Education qt7j06g804, Center for Tobacco Control Research and Education, UC San Francisco.
  4. Frank A. Sloan & Justin G. Trogdon, 2004. "Litigation and the Political Clout of the Tobacco Companies: Cigarette Taxes, Prices, and the Master Settlement Agreement," School of Economics Working Papers 2004-04, University of Adelaide, School of Economics.
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