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Tobacco Taxes, Smoking Restrictions, and Tobacco Use


  • Robert L. Ohsfeldt
  • Raymond G. Boyle
  • Eli L. Capilouto


Tobacco researchers have focused considerable attention on the evaluation of various mechanisms to control cigarette use, including regulation of economic availability through increases in cigarette excise taxes. In contrast, the effects of mechanisms to control the availability of ST product on ST use have not been as extensively studied. This paper presents estimates of the effects of tobacco excise taxes and laws restricting public smoking on the likelihood of current use of different forms of tobacco (moist snuff and cigarettes) obtained from tobacco use data in the Current Population Surveys (CPS) for September 1992, January 1993, and May 1993. The full sample is restricted to males age 16 or older who self identify as either white or black (i.e., other' is excluded), which yields a usable sample of 165,653 individuals. This large sample is particularly useful given the relative rarity of self-reported snuff use (about 18% of those in the sample report current use but only 1.2% report current snuff use). The results indicate that individuals living in areas with higher snuff tax rates are to be less likely to use snuff. A 1% increase in the snuff tax rate is estimated to reduce the probability of snuff use by -0.10%. Consistent with numerous prior studies, individuals in areas with higher cigarette ta rates are less likely to smoke cigarettes. In terms of cross-tax effects, higher cigarette tax rates are associated with a higher probability of snuff use. This is consistent with substitution of snuff for cigarettes when the price of cigarettes increases relative to the price of snuff. However, higher snuff tax rates are not associated with greater cigarette use. Finally, laws restricting smoking in workplaces or other public places appear to discourage both cigarette and snuff use, though less consistently so for snuff.

Suggested Citation

  • Robert L. Ohsfeldt & Raymond G. Boyle & Eli L. Capilouto, 1998. "Tobacco Taxes, Smoking Restrictions, and Tobacco Use," NBER Working Papers 6486, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6486
    Note: HE

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    References listed on IDEAS

    1. Chaloupka, Frank, 1991. "Rational Addictive Behavior and Cigarette Smoking," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 722-742, August.
    2. Becker, Gary S & Grossman, Michael & Murphy, Kevin M, 1994. "An Empirical Analysis of Cigarette Addiction," American Economic Review, American Economic Association, vol. 84(3), pages 396-418, June.
    3. Smith, Marlene A. & Maddala, G. S., 1983. "Multiple model testing for non-nested heteroskedastic censored regression models," Journal of Econometrics, Elsevier, vol. 21(1), pages 71-81, January.
    4. Frank J. Chaloupka & Michael Grossman & John A. Tauras, 1996. "Public Policy and Youth Smokeless Tobacco Use," NBER Working Papers 5524, National Bureau of Economic Research, Inc.
    5. Michael Grossman, 1972. "The Demand for Health: A Theoretical and Empirical Investigation," NBER Books, National Bureau of Economic Research, Inc, number gros72-1, August.
    6. 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.
    7. Grossman, Michael, 1991. "The demand for cigarettes," Journal of Health Economics, Elsevier, vol. 10(1), pages 101-103, May.
    8. Frank J. Chaloupka & Henry Saffer, 1992. "Clean Indoor Air Laws And The Demand For Cigarettes," Contemporary Economic Policy, Western Economic Association International, vol. 10(2), pages 72-83, April.
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    Cited by:

    1. Jeffrey D. Kubik & John R. Moran, 2001. "Can Policy Changes Be Treated as Natural Experiments? Evidence from State Excise Taxes," Center for Policy Research Working Papers 39, Center for Policy Research, Maxwell School, Syracuse University.
    2. Al Mohamed, 2002. "Excise Taxation and Tobacco Consumption in South Africa: A Note," South African Journal of Economics, Economic Society of South Africa, vol. 70(3), pages 268-272, March.
    3. John A. Tauras & Frank J. Chaloupka, 1999. "Determinants of Smoking Cessation: An Analysis of Young Adult Men and Women," NBER Working Papers 7262, National Bureau of Economic Research, Inc.

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