“Cigarette Taxes and Older Adult Smoking: Evidence from Recent Large Tax Increases.”

Department of Economics and CHEPA, McMaster University, Canada.
Journal of Health Economics (Impact Factor: 2.58). 08/2008; 27(4):918-29. DOI: 10.1016/j.jhealeco.2007.11.005
Source: PubMed


While recent evidence casts some doubt, it is generally accepted that the price sensitivity of smoking varies inversely with age. We investigate the responsiveness of older adult smoking using variation from recent historically large cigarette tax increases in the United States. Using data from the Behavioral Risk Factor Surveillance System from 2000 to 2005, we find consistent evidence that higher taxes reduced smoking participation by older adults, especially those who are less educated and live in low-income households. Our findings run contrary to existing evidence which suggests that cessation behavior by older adults is not sensitive to price. Since a large literature suggests smoking cessation even later in life reduces morbidity and increases longevity, our findings may represent substantial gains in health among tax-induced quitters.

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    • "A wave of new smoke-free air laws have been enacted in states, with tremendous variation on the degree of the restrictions and the public places to which the laws pertain. Recent studies find negative price and tax effects on different measures of smoking (Adda and Cornaglia, 2010; DeCicca and McLeod 2008; Stehr 2005). Several econometric studies have also examined the effects of smoke-free air laws on adult smoking behavior. "
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    • "Additionally, when choosing a distribution, the Akaike Information Criterion (AIC) was lowest for the negative binomial model though simple OLS models resulted in largely similar findings. is motivated by the argument that changes in consumption should be largest for the largest tax increases (DeCicca and McLeod 2008). "
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    • "New research on the demand for cigarettes in the post-MSA era is emerging. Estimates show that, in general, youths and adults are still price sensitive ðTauras, Markowitz, and Cawley 2005; Carpenter and Cook 2008; DeCicca and McLeod 2008Þ. However, the effectiveness of smoking bans in reducing consumption is in question, with some recent studies finding little to no effect of smoking bans in reducing smoking behaviors ðBitler, Carpenter, and Zavodny 2009; Adda and Cornaglia 2010; Carpenter , Postolek, and Warman 2011; Owyang and Vermann 2012Þ. "
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