TY  - JOUR
AU  - Decker,Sandra L.
AU  - Schwartz,Amy Ellen
TI  - Cigarettes and Alcohol: Substitutes or Complements?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7535
PY  - 2000
Y2  - February 2000
UR  - http://www.nber.org/papers/w7535
L1  - http://www.nber.org/papers/w7535.pdf
N1  - Author contact info:
Sandra Decker
Senior Service Fellow
National Center for Health Statistics
Centers for Disease Control and Prevention
3311 Toledo Road (Room 3316)
Hyattsville, MD 20782
Tel: 301/458-4748
Fax: 301/458-4693
E-Mail: esp4@cdc.gov

Amy Ellen Schwartz
Institute for Education & Social Policy, New York
665 Broadway, Suite 805
New York, NY 10012
E-Mail: amy.schwartz@nyu.edu
AB  - Taxation of cigarettes and alcohol can raise revenue and reduce consumption of goods with negative external effects. Despite medical and psychological evidence linking their consumption, little previous work has investigated the significance of cross-price effects in cigarette and alcohol consumption.  We use individual-level data from the Behavioral Risk Factor Surveillance System to investigate cigarette and alcohol consumption in the US, estimating both own and cross-price elasticities. Results suggest significant cross-price effects. Specifically, we find that higher alcohol prices decrease both alcohol consumption and smoking participation (suggesting a complementarity in consumption), while higher cigarette prices tend to decrease smoking participation but increase drinking. The significance of these findings suggests that further work is warranted to better understand the social and economic relationship between cigarette and alcohol consumption.
ER  -