IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Cigarette Purchasing Patterns among New York Smokers: Implications for Health, Price, and Revenue

Listed author(s):
  • New York State Department of Health
  • (Kevin Davis)
  • (Matthew Farrelly)
  • (Qiang Li)
  • (Andrew Hyland)
Registered author(s):

    Executive Summary Raising the price of cigarettes is one of the most effective interventions to prevent and reduce cigarette use. Local, state, and federal governments can change the price of cigarettes by raising or lowering cigarette excise taxes and by implementing and enforcing minimum price laws. Smokers can also adjust their behavior by choosing discount or “bargain†brands, buying fewer cigarettes, and avoiding paying cigarette taxes by purchasing from retailers that do not levy all applicable state and local taxes, such as Indian reservations and Internet cigarette vendors. Purchasing low price or untaxed cigarettes is common among smokers in New York. The most common source of cigarette tax avoidance in New York is purchasing from Indian reservations, especially in the western areas of the state. This behavior undermines the state’s efforts to prevent and reduce tobacco use. Cigarette tax avoidance not only reduces smokers’ incentives to quit smoking or reduce the amount they smoke, but it also results in a significant loss of state tax revenue that could be devoted to public health interventions aimed at reducing smoking. Lost revenue due to unpaid cigarette taxes also deprives the state of resources to address other public health issues. This report examines smokers’ cigarette purchasing patterns with a focus on quantifying the extent of tax evasion in New York and identifying the characteristics of smokers who most frequently seek out and purchase low price and untaxed cigarettes. This report also examines the overall health and financial impacts of cigarette tax avoidance in New York by calculating the reduction in cessation and quantifying the amount of tax revenue lost due to tax avoidance via specific low price and untaxed sources. Specific findings include the following: · Thirty-seven percent of New York smokers report purchasing cigarettes from low price (mainly untaxed) sources “all the time†or “sometimes.†· Purchase of lower price cigarettes is associated with reduced intentions to quit smoking and fewer attempts to quit smoking. · If all smokers paid the average retail price for cigarettes (including the excise tax), the current prevalence of smoking would be 2 to 3 percent lower, representing between 51,026 and 76,539 fewer adult smokers in New York. · Revenue lost to the state as a result of purchasing low price (mainly untaxed) cigarettes is estimated to be between $436 million and $576 million in 2004.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:;origin=repeccitec
    Download Restriction: no

    Paper provided by Center for Tobacco Control Research and Education, UC San Francisco in its series University of California at San Francisco, Center for Tobacco Control Research and Education with number qt8026w9n0.

    in new window

    Date of creation: 01 Mar 2006
    Handle: RePEc:cdl:ctcres:qt8026w9n0
    Contact details of provider: Web page:

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    in new window

    1. Matthew C. Farrelly & Jeremy W. Bray & Terry Pechacek & Trevor Woollery, 2001. "Response by Adults to Increases in Cigarette Prices by Sociodemographic Characteristics," Southern Economic Journal, Southern Economic Association, vol. 68(1), pages 156-165, July.
    2. Keeler, Theodore E. & Hu, Teh-wei & Barnett, Paul G. & Manning, Willard G. & Sung, Hai-Yen, 1996. "Do cigarette producers price-discriminate by state? An empirical analysis of local cigarette pricing and taxation," Journal of Health Economics, Elsevier, vol. 15(4), pages 499-512, August.
    3. Tauras, John A., 2004. "Public policy and smoking cessation among young adults in the United States," Health Policy, Elsevier, vol. 68(3), pages 321-332, June.
    4. Jonathan Gruber & Jonathan Zinman, 2001. "Youth Smoking in the United States: Evidence and Implications," NBER Chapters,in: Risky Behavior among Youths: An Economic Analysis, pages 69-120 National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:cdl:ctcres:qt8026w9n0. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.