The Potential for Using Excise Taxes to Reduce Smoking
We examine the potential for reducing cigarette smoking through increases in cigarette excise taxes by estimating the price elasticity of demand for cigarettes. Using information on individual smoking behavior for a sample of adults in the 1976 Health Interview Survey, we estimate the adult price elasticity of demand for cigarettes to be -.45. Moreover, we find that price has its greatest effect on the smoking behavior of young males and that it operates primarily on the decision to begin smoking regularly rather than via adjustments in the quantity of cigarettes smoked by smokers. It follows that, if future reductions in cigarette smoking are desired, Federal excise tax policy can be a potent tool to accomplish this goal, but only in the long run. An excise tax increase, if maintained in real terms, would discourage smoking participation by successive cohorts of young adults and those reduced smoking levels would be reflected in aggregate smoking as these cohorts mature. In the short run however, the impact of an excise tax increase on aggregate cigarette consumption would be relatively small.
|Date of creation:||Sep 1981|
|Date of revision:|
|Publication status:||published as Lewit, Eugene M. and Douglas Coate. "The Potential for Using Excise Taxes to Reduce Smoking." Journal of Health Economics, Vol. 1, No. 2 (1982) pp. 12 1-145.|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
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.:
- Benjamin Klein & Kevin M. Murphy & Lynne Schneider, 1981.
"Governmental REgualtion of Cigarette Health Information,"
UCLA Economics Working Papers
200, UCLA Department of Economics.
- Schneider, Lynne & Klein, Benjamin & Murphy, Kevin M, 1981. "Governmental Regulation of Cigarette Health Information," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 575-612, December.
- Barzel, Yoram, 1976. "An Alternative Approach to the Analysis of Taxation," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1177-97, December.
- Eugene M. Lewit & Douglas Coate & Michael Grossman, 1981.
"The Effects of Government Regulation on Teenage Smoking,"
NBER Working Papers
0655, National Bureau of Economic Research, Inc.
- 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 545-69, December.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:0764. 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: ()
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.