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Journal Articles
Abstract:
but not all – finding that higher taxes reduce youth consumption of tobacco. We advance the literature by using data from the
11 1991 to 2005 waves of the national Youth Risk Behavior Surveys (YRBS), providing information on over 100,000 high school
12 age youths. We also are the first to make use of hundreds of independently fielded state and local versions of the YRBS, reflecting
13 data from over 750,000 youths. Importantly, these data are to our knowledge the only sources of relevant information on youth
14 smoking that were explicitly designed to be representative of the sampled state or locality.We estimate two-way fixed effects models
15 of the effect of state cigarette taxes on youth smoking, controlling for survey demographics and area and year fixed effects. Our
16 most consistent finding is that – contrary to some recent research – the large state tobacco tax increases of the past 15 years were
17 associated with significant reductions in smoking participation and frequent smoking by youths. Our price elasticity estimates for
18 smoking participation by high school youths are generally smaller than previous cross-sectional approaches but are similar to recent
19 quasi-experimental estimates.
20 © 2007 Elsevier B.V. All rights reserved.
21 Keywords: Cigarette tax; Tobacco control; Smoking; Youth substance use
22
22 1. Introduction
23 Is youth smoking price sensitive? Conventional wisdom in research and policy circles is that, indeed, the smoking
24 behaviors of youths and young adults are highly sensitive to price, more so than for adults who as a group may have
25 better established habits. In fact, this reasoning has been explicitly voiced as a motivation for numerous recently
26 proposed and adopted state cigarette tax increases, which have become much larger in magnitude over the past decade
27 (Fig. 1). Despite this conventional wisdom, however, a series of recent studies in the economics literature has called into
28 question whether higher cigarette taxes will “put out the fires” from youth smoking. Using panel data on youths from
29 the National Educational Longitudinal Study (NELS), DeCicca et al. (2002) find that once time-invariant state fixed
Q4 effects are accounted for, youth smoking initiation is statistically unrelated to cigarette taxes. More recently, DeCicca 30
31 et al. (2004, 2006) argue that the strong negative cross-sectional association between cigarette taxes and youth smoking