By 1997, the proportion of teenage smokers had risen by one-third from its 1991 trough... The price decline of the early 1990s can explain about a quarter of this smoking rise.
Smoking among youths in the United States rose precipitously starting in 1992 after declining for the previous 15 years. By 1997, the proportion of teenage smokers had risen by one-third from its 1991 trough. This trend is particularly striking in light of the continuing steady decline in smoking by adult Americans. "Today we are in the alarming position of having a youth smoking rate that is roughly 50 percent greater than the smoking rate of adults," note NBER Research Associate Jonathan Gruber and Jonathan Zinman in Youth Smoking in the U.S.: Evidence and Implications (NBER Working Paper No. 7780).
Gruber and Zinman note that, unlike adult smoking, youth smoking is not concentrated among the least disadvantaged; it is even higher among white or suburban youth than among black or urban youth. Indeed, the recent rise in youth smoking has been most striking among the most advantaged youth. At the same time, however, changes in background characteristics can explain only a small share -- less than 10 percent -- of the recent precipitous rise in youth smoking.
A more prominent explanation for the rise in youth smoking over the 1990s was a sharp decline in cigarette prices in the early 1990s, caused by a price war between the tobacco companies. Gruber and Zinman find that young people are very sensitive to the price of cigarettes in their smoking decisions. The authors estimate that for every 10 percent decline in the price, youth smoking rises by almost 7 percent, a much stronger price sensitivity than is typically found for adult smokers. As a result, the price decline of the early 1990s can explain about a quarter of the smoking rise from 1992 through 1997. Similarly, the significant decline in youth smoking observed in 1998 is at least partially explainable by the first steep rise in cigarette prices since the early 1990s. The authors also find that black youths and those with less educated parents are much more responsive to changes in cigarette prices than are white teens and those with more educated parents.
However, price does not appear to be an important determinant of smoking by younger teens. This may be because they are more experimental smokers. Gruber and Zinman do find some evidence that restrictions on access to cigarette purchases can lower the quantity that younger teens smoke. But there is no consistent evidence that restrictions on smoking in public places lowers the incidence of youth smoking. Overall, the most influential tool that policymakers have to reduce youth smoking is clearly excise taxes that raise the price of cigarettes.
The two authors also express concern that youth smoking will lead to adult smoking, and that the young smokers underestimate this connection. For example, among high school seniors who smoke, 56 percent say they won't be smoking in five years. But only 31 percent of them in fact have quit five years hence. Among those who smoke more than one pack per day, the smoking rate five years later for those who stated that they would not be smoking (74 percent) is actually higher than the smoking rate for those who stated that they would be smoking (72 percent).
Gruber and Zinman therefore explore the extent to which higher youth smoking translates into higher smoking among adults. They first examine historical data on how the smoking rates among youths in the past are associated with the smoking rates of those same youths as they age. They then examine how the smoking rates of adults are affected by the tax rates that they faced as youths. That is, if there are two adults who face the same tax regime today, but who faced different tax regimes as teens, how much does their smoking differ? The authors find that there is a significant reduction in smoking as an adult associated with facing a higher tax rate as a youth, confirming the important role of youth smoking in driving adult smoking decisions.
Overall, Gruber and Zinman estimate that between 25 and 50 percent of the rise in youth smoking in the 1990s will persist into adulthood for this group. This "can have drastic implications for the health of the U.S. population," the authors add. Smoking-related illness is the leading preventable cause of death in the United States. Male smokers on average live 6.5 fewer years than those who have never smoked; female smokers live 5.7 years less. Even if the 1990s rise in youth smoking is transitory, the adult smoking rate for the 1990s cohort will rise by 8 to 16 percent, or 477,000 to 950,000 extra adult smokers.
Some 25 percent of adults now smoke, despite the smoking bans and other hassles they now face in the workplace. Of these still smoking at age 35, about 45 percent will quit by age 60 when they face the greatest health risk from smoking. So some 263,000 to 525,000 smokers face a loss of 1.6 million to 3.2 million life years. This translates into a cost for them and the nation of $36 billion to $73 billion in today's dollars, Gruber and Zinman estimate.
-- David R. Francis