The Effect of the 1998 Master Settlement on Prenatal Smoking
NBER Working Paper No. 11176
The Master Settlement Agreement (MSA) between the major tobacco companies and 46 states created an abrupt 45 cent (21%) increase in cigarette prices in November, 1998. Earlier estimates of the elasticity of prenatal smoking implied that the price rise would reduce prenatal cigarette smoking by 7% to 21%. Using birth records on 10 million U.S. births between January 1996 and February 2000, we examined the change in smoking during pregnancy and conditional smoking intensity in response to the MSA. Overall, adjusting for secular trends in smoking, prenatal smoking declined much less than predicted in response to the MSA.
Published: Levy, Douglas E. and Ellen Meara. "The Effect Of The 1998 Master Settlement Agreement On Prenatal Smoking," Journal of Health Economics, 2006, v25(2,Mar), 276-294.