Cigarette Taxes and the Transition from Youth to Adult Smoking: Smoking Initiation, Cessation, and Participation

47 Pages Posted: 2 Jun 2008 Last revised: 3 Jun 2008

See all articles by Philip DeCicca

Philip DeCicca

McMaster University - Department of Economics; Ball State--Department of Economics

Donald Kenkel

Cornell University - Department of Policy Analysis & Management (PAM); National Bureau of Economic Research (NBER)

Alan D. Mathios

Cornell University - Department of Policy Analysis & Management (PAM)

Date Written: May 2008

Abstract

Policy makers continue to advocate and adopt cigarette taxes as a public health measure. Most previous individual-level empirical studies of cigarette demand are essentially static analyses. In this study, we use longitudinal data to examine the dynamics of young adults' decisions about smoking initiation and cessation. We develop a simple model to highlight the distinctions between smoking initiation, cessation, and participation and show that the price elasticity of smoking participation is a weighted average of corresponding initiation and cessation elasticities, a finding that applies more broadly to other addictive substances as well. The paper's remaining contributions are empirical. We use data from the 1992 wave of the National Education Longitudinal Study, when most of the cohort were high school seniors, and data from the 2000 wave, when they were about 26 years old. The results show that the distinction between initiation and cessation is empirically useful. We also contribute new estimates on the tax-responsiveness of young adult smoking, paying careful attention to the possibility of bias if hard-to-observe differences in anti-smoking sentiment are correlated with state cigarette taxes. We find no evidence that higher taxes prevent smoking initiation, but some evidence that higher taxes are associated with increased cessation.

Suggested Citation

DeCicca, Philip and Kenkel, Donald and Mathios, Alan D., Cigarette Taxes and the Transition from Youth to Adult Smoking: Smoking Initiation, Cessation, and Participation (May 2008). NBER Working Paper No. w14042. Available at SSRN: https://ssrn.com/abstract=1139358

Philip DeCicca

McMaster University - Department of Economics ( email )

Hamilton, Ontario L8S 4M4
Canada

Ball State--Department of Economics ( email )

United States

Donald Kenkel (Contact Author)

Cornell University - Department of Policy Analysis & Management (PAM) ( email )

120 Martha Van Rensselaer Hall
Ithaca, NY 14853
United States
607-255-2594 (Phone)
607-255-4071 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Alan D. Mathios

Cornell University - Department of Policy Analysis & Management (PAM) ( email )

120 Martha Van Rensselaer Hall
Ithaca, NY 14853
United States
607-255-2589 (Phone)
607-255-0799 (Fax)

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