The Demand for Cigarettes as Derived from the Demand for Weight Control

38 Pages Posted: 23 Feb 2013

See all articles by John Cawley

John Cawley

Cornell University - College of Human Ecology, Department of Policy Analysis & Management (PAM); Cornell University - College of Arts & Sciences, Department of Economics; Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); National University of Ireland, Galway (NUIG) - J.E. Cairnes School of Business & Economics; NBER; IZA

Stephanie von Hinke Kessler Scholder

University of Bristol

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Abstract

We provide new evidence on the extent to which the demand for cigarettes is derived from the demand for weight control (i.e. weight loss or avoidance of weight gain). We utilize nationally representative data that provide the most direct evidence to date on this question: individuals are directly asked whether they smoke to control their weight. We find that, among teenagers who smoke frequently, 46% of girls and 30% of boys are smoking in part to control their weight. This practice is significantly more common among youths who describe themselves as too fat than those who describe themselves as about the right weight.The derived demand for cigarettes has important implications for tax policy. Under reasonable assumptions, the demand for cigarettes is less price elastic among those who smoke for weight control. Thus, taxes on cigarettes will result in less behavior change (but more revenue collection and less deadweight loss) among those for whom the demand for cigarettes is a derived demand. Public health efforts to reduce smoking initiation and encourage cessation may wish to design campaigns to alter the derived nature of cigarette demand, especially among adolescent girls.

Keywords: smoking, cigarettes, obesity, BMI, weight, derived demand, price elasticity

JEL Classification: I1, D01, H2, H3, Z18

Suggested Citation

Cawley, John and von Hinke Kessler Scholder, Stephanie, The Demand for Cigarettes as Derived from the Demand for Weight Control. IZA Discussion Paper No. 7213, Available at SSRN: https://ssrn.com/abstract=2223120

John Cawley (Contact Author)

Cornell University - College of Human Ecology, Department of Policy Analysis & Management (PAM) ( email )

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Cornell University - College of Arts & Sciences, Department of Economics ( email )

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Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

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National University of Ireland, Galway (NUIG) - J.E. Cairnes School of Business & Economics ( email )

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NBER

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IZA ( email )

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Stephanie Von Hinke Kessler Scholder

University of Bristol ( email )

8 Woodland Road
Bristol, BS8 1TN
United Kingdom

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