Cigarette Demand and Effectiveness of U.S. Smoking Control Policies: State-Level Evidence for More than Half a Century

Posted: 23 Mar 2016 Last revised: 19 Apr 2016

See all articles by Rajeev K. Goel

Rajeev K. Goel

Illinois State University - Department of Economics

Michael A. Nelson

University of Akron - Department of Economics

Date Written: 2012

Abstract

Using state-level U.S. data over 1956–2008 this paper examines the demand for cigarettes. The long data span enables us to compare and evaluate the effectiveness of various policies and to examine cigarette demand across individual states. Our results show cigarette demand to be price inelastic, smoking-habit effects to be strong, income effects to be small, and border price effects can be significant. These findings are quite robust across alternate model specifications. None of the three smoking control policies considered (Fairness Doctrine, Broadcast Ban, and Master Settlement Agreement) were shown to be effective in curbing overall smoking, although most were effective in a few states. Policy implications are discussed.

Suggested Citation

Goel, Rajeev K. and Nelson, Michael A., Cigarette Demand and Effectiveness of U.S. Smoking Control Policies: State-Level Evidence for More than Half a Century (2012). Empirical Economics, Vol. 42, No. 3, pp.1079-1095, 2012. Available at SSRN: https://ssrn.com/abstract=2752660

Rajeev K. Goel (Contact Author)

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

Michael A. Nelson

University of Akron - Department of Economics ( email )

Akron, OH 44325
United States
330-972-7939 (Phone)
330-972-5356 (Fax)

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