The Effect of Taxes and Bans on Passive Smoking

48 Pages Posted: 25 Jul 2006

See all articles by Jerome Adda

Jerome Adda

University College London - Department of Economics; Institute for Fiscal Studies (IFS)

Francesca Cornaglia

Queen Mary University of London; London School of Economics & Political Science (LSE), CEP; Institute for the Study of Labor (IZA)

Date Written: July 2006

Abstract

This paper evaluates the effect of excise taxes and bans on smoking in public places on the exposure to tobacco smoke of non-smokers. We use a novel way of quantifying passive smoking: we use data on cotinine concentration - a metabolite of nicotine - measured in a large population of non-smokers over time. Exploiting state and time variation across US states, we show that excise taxes have a significant effect on passive smoking but smoking bans have contrasting effects on non-smokers. While bans in public transportation or in schools decrease the exposure of non-smokers, bans in recreational public places perversely increase their exposure by displacing smokers to private places where they contaminate non-smokers, and in particular young children. Bans affect socio-economic groups differently: we find that smoking bans increase the exposure of poorer individuals, while it decreases the exposure of richer individuals.

Keywords: passive smoking, bans, taxes

JEL Classification: I1

Suggested Citation

Adda, Jerome and Cornaglia, Francesca, The Effect of Taxes and Bans on Passive Smoking (July 2006). IZA Discussion Paper No. 2191, Available at SSRN: https://ssrn.com/abstract=919963

Jerome Adda

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

Institute for Fiscal Studies (IFS)

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Francesca Cornaglia (Contact Author)

Queen Mary University of London ( email )

Mile End Road
London, E14NS
United Kingdom

London School of Economics & Political Science (LSE), CEP ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

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