The effects of excise taxes and regulations on cigarette smoking

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Abstract

We estimate a generalized linear model to examine adult and teenage cigarette demand. Our analysis focuses on the extent to which exice taxes and regulations restricting smoking in public places affect cigarette consumption. The adult results indicate that the price elasticity of demand is unstable over time, ranging from 0.06 in 1970 to -0.23 in 1985. These estimates are lower than most found in previous studies. The teenage price elasticity does not differ statistically from the estimates for adults. Additionally, regulations restricting smoking in public places have a significant effect on both adult and teenage cigarette demand.

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    Research for this paper was supported, in part, by the Pew Charitable Trusts. The authors wish to thank Michael Grossman and two anonymous referees for their helpful comments on an earlier version of the paper, Robert Bell for developing the software used to estimate the generalized linear model, Alicia Bell for her data management support, and Marlise Goodwin for her assistance in preparing the manuscript.

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