Tobacco policy and tobacco use: differences across tobacco types, gender and age

Abstract

Using state-level data for 1997, this paper studies the effectiveness of tobacco policies at reducing tobacco use across different population groups in the USA. The effectiveness of tax (price)-based and non-price tobacco policies are examined on tobacco prevalence (including cigarettes and smokeless tobacco) across gender and age. Besides shedding light on the efficacy of sub-national tobacco policies, the results also examine the extent of spillovers of policy actions across tobacco types. Significant differences in tobacco use are found across gender, age, policies, and between smoking and smokeless tobacco. Policy implications are discussed.

Acknowledgements

The research assistance of Eric Cochran and Richard Connelly is appreciated.

Notes

According to the US Centers for Disease Control (CDC) and the World Health Organization (WHO) nearly 14% of the youth in the world smoke (www.cnn.com/2002/HEALTH/08/29/youth.smoking/Index.html).

Following earlier literature, it is assumed that the primary variation in the tobacco prices among the states can be attributable to federal and state tax policies.

These are, to the authors’ knowledge, the best available price data for smokeless tobacco.

Given this limited variability, the corresponding results with respect to age should be interpreted with caution.

The relatively low explanatory power of regressions seems common in studies of smoking participation (see Gruber and Zinman, 2001).

The average retail price per 20-pack of cigarettes was also used in place of the cigarette tax and the results were qualitatively similar. Details are available from the authors upon request.

Lanoie and Leclair (1998) constructed an index of regulation in Canada that covered several regulatory aspects and found that while greater regulation was effective in reducing smoking participation rates in Canada, excise taxes were ineffective. Interestingly, the relative effectiveness of price versus non-price policies was reversed when a demand function was estimated.

Ohsfeldt and Boyle (1994) found higher cigarette taxes increased smokeless use, suggesting that the two products were substitutes for adults.