Price, tobacco control policies and youth smoking. NBER Working Paper Series No. 5740

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• Earmarking
• Tobacco taxes: Design and administration

Abstract

This paper examines the effectiveness of several tobacco control policies in discouraging cigarette smoking among youths. These policies include increased cigarette excise taxes (which result in higher cigarette prices), restrictions on smoking in public places and at private worksites, and limits on the availability of tobacco products to youths, The data employed in this research are taken from the 1992, 1993, and 1994 surveys of eighth, tenth, and twelfth grade students conducted by the University of Michigan’s Institute for Social Research as part of the Monitoring the Future Project. Site specific cigarette prices and measures of tobacco related policies are added to the survey data. The results indicate that tobacco control policies can be effective in reducing youth cigarette smoking. The average overall estimated price elasticity of youth cigarette demand of -1,313 indicates that large increases in cigarette excise taxes would lead to sharp reductions in youth smoking. Similarly, strong restrictions on smoking in public places would reduce the prevalence of smoking among youths, while limits on smoking in schools would reduce average cigarette consumption among young smokers, However, limits on youth access to tobacco products appear to have little impact on youth cigarette smoking. This is most likely the result of the relatively weak enforcement of these laws.