The Effect of Taxes and Bans on Passive Smoking
48 Pages Posted: 25 Jul 2006
Date Written: July 2006
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
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