Tobacco Control Policies and Youth Cigarette Smoking: Evidence from State Youth Risk Behavioral Survey Year 1991 to 2013

Raising cigarette costs, either directly or indirectly, has been seen as a promising tool to lower tobacco consumption in the general population. Policies that increase costs directly by leveraging cigarette excise taxes, or indirectly through other venues such as smoking restrictions have had great successes among youth over the past years. Using state-specific Youth Risk Behavioral Surveillance (YRBS) from 1991 to 2005, Carpenter and Cook (2008) (hereinafter C&C) found consistent impacts of state tobacco taxes on youth smoking participation and frequency. Using the same dataset with updated information from 2007 and onward, a recent NBER paper by Hansen B, et al. (2015) concluded otherwise. Employing a similar statistical framework, Hansen and co-authors found little deterring effects of state cigarette taxes on teenage smoking. What happened to cigarette taxes and why they no longer exert statistical power in preventing youth smoking participation? On the first sight, it is hard to unwind. Is it because youth smoking is decreasing irrespective of state’s taxation? In that sense, the justification for raising taxes would be slim. Or is it because of the conventional linear functional form assumption that fails to document the real power of taxes? In this paper, I revisit state cigarette excise taxes on youth smoking participation and frequency using the semi-parametric modeling framework. The model assumes no ex-ante functional form for taxes but renders other factors such as individual characteristics, state tobacco control policies, and state anti-smoking sentiment as linear. The preliminary results show a diminishing power of cigarette taxes that speaks directly to states with two different taxation regimes. For those that have already taxed cigarettes at a high level, additional tax increases would reap little effects. However, for those that cigarette taxes are still set on the low spectrum, it is promising that raising taxes can efficaciously deter youth from smoking. State anti-smoking sentiment, created using the factor analysis, exerts a nontrivial impact on youth cigarette conditional demand; however, on the extensive margin, the effect is limited. Other tobacco control policies showed inconsistent results on youth smoking. Taken together, the preliminary finding suggests a limited ability of legislative activity to curb youth smoking participation through other venues but point to a robust and meaningful role for higher cigarette taxes among certain states.

Reference: 

Carpenter, C. and Cook, P. J (2008). Cigarette taxes and youth smoking: new evidence from national, state, and local Youth Risk Behavior Surveys. Journal of Health Economics, 27(2), 287-299.

Hansen, B., Sabia, J. J., & Rees, D. I. (2015). Cigarette Taxes and Youth Smoking: Updated Estimates Using YRBS Data. National Bureau of Economic Research.