TY  - JOUR
AU  - Callison,Kevin
AU  - Kaestner,Robert
TI  - Do Higher Tobacco Taxes Reduce Adult Smoking? New Evidence of the Effect of Recent Cigarette Tax Increases on Adult Smoking
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18326
PY  - 2012
Y2  - August 2012
UR  - http://www.nber.org/papers/w18326
L1  - http://www.nber.org/papers/w18326.pdf
N1  - Author contact info:
Kevin Callison
Department of Economics
University of Illinois at Chicago
601 S. Morgan St. UH725 M/C 144
Chicago, IL 60607
E-Mail: kcalli2@nber.org

Robert Kaestner
Institute of Government and Public Affairs
University of Illinois
815 West Van Buren Street, Suite 525
Chicago, IL  60607
Tel: 312/996-8227
E-Mail: kaestner.robert@gmail.com
AB  - There is a general consensus among policymakers that raising tobacco taxes reduces cigarette consumption. However, evidence that tobacco taxes reduce adult smoking is relatively sparse. In this paper, we extend the literature in two ways: using data from the Current Population Survey Tobacco Use Supplements we focus on recent, large tax changes, which provide the best opportunity to empirically observe a response in cigarette consumption, and employ a novel paired difference-in-differences technique to estimate the association between tax increases and cigarette consumption. Estimates indicate that, for adults, the association between cigarette taxes and either smoking participation or smoking intensity is negative, small and not usually statistically significant. Our evidence suggests that increases in cigarette taxes are associated with small decreases in cigarette consumption and that it will take sizable tax increases, on the order of 100%, to decrease adult smoking by as much as 5%.
ER  -