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Price, Clean Indoor Air, and Cigarette Smoking: Evidence from the Longitudinal Data for Young Adults

  • John A. Tauras
  • Frank J. Chaloupka

The upward trend in cigarette smoking among teenagers throughout the 1990's has spurred a great deal of interest on how to discourage young people from smoking. This paper attempts to inform policy makers by providing evidence on the effects cigarette prices (which can be increased through cigarette excise taxes) and restrictions on smoking in public places and private worksites have on the use of cigarettes by young adults. Data on cigarette use are taken from the 1976 through 1993 surveys of high school seniors as part of the Monitoring the Future program. Seven follow-ups are conducted on each senior class and therefore each individual is sampled up to eight times. Site-specific data on cigarette prices and clean indoor air laws are added to the survey data. Individual fixed effects methods are used to estimate smoking participation and conditional demand equations. The results indicate that increases in cigarette prices would lead to significant reductions in both the number of people smoking and the frequency with which individuals smoke. The estimated overall average price elasticity of demand is -0.791. In addition, restrictions on smoking in public places and private worksites are found to be effective in reducing both the intensity and the propensity to smoke.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6937.

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Date of creation: Feb 1999
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Handle: RePEc:nbr:nberwo:6937
Note: HE
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  1. 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.
  2. Frank J. Chaloupka, 1990. "Rational Addictive Behavior and Cigarette Smoking," NBER Working Papers 3268, National Bureau of Economic Research, Inc.
  3. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
  4. Frank J. Chaloupka, 1990. "Men, Women, and Addiction: The Case of Cigarette Smoking," NBER Working Papers 3267, National Bureau of Economic Research, Inc.
  5. Chaloupka, Frank J. & Wechsler, Henry, 1997. "Price, tobacco control policies and smoking among young adults," Journal of Health Economics, Elsevier, vol. 16(3), pages 359-373, June.
  6. Wasserman, Jeffrey & Manning, Willard G. & Newhouse, Joseph P. & Winkler, John D., 1991. "The effects of excise taxes and regulations on cigarette smoking," Journal of Health Economics, Elsevier, vol. 10(1), pages 43-64, May.
  7. Frank J. Chaloupka & Michael Grossman, 1996. "Price, Tobacco Control Policies and Youth Smoking," NBER Working Papers 5740, National Bureau of Economic Research, Inc.
  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, 04.
  9. Lewit, Eugene M. & Coate, Douglas, 1982. "The potential for using excise taxes to reduce smoking," Journal of Health Economics, Elsevier, vol. 1(2), pages 121-145, August.
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