Determinants of various aspects of smoking behaviour in the United States

Abstract

Using state-level data for the United States, this study uniquely examines the effects of cigarette prices and income on seven dimensions of smoking behaviour. Results show that income-based policies are relatively more effective than price- or tax-based policies. Smokers considering quitting smoking respond in expected ways to changing cigarette prices and income. Strong habit effects in most cases stress the need for early intervention programmes.

Keywords:

• smoking
• demand
• intensity
• smuggling

JEL Classification:

• I00
• D12

Notes

¹Note that as all the continuous variables are in natural logs, the resulting coefficients are respective elasticities.

²Gallet and List (2003) have noted in their review of the literature that the price and income elasticities of cigarette demand are sensitive to the underlying data sample.

³Details are available upon request.

⁴In particular, the respective F-values across the seven models in Table 2 were, respectively, 0.17; 0.75; 0.54; 3.8**; 7.6**; 0.77; and 0.57. This suggests that the two cases involving the intensive smokers (NumCig and DailySmk) perhaps had some considerations that were beyond the available data. We reran the regressions in these two instances by alternately dropping the lagged consumption variable and the border price variable. The F-value was still statistically significant, suggesting perhaps that micro-level data would likely capture additional nuances of intensive smokers in these categories.