Do Cigarette Taxes Work?
Here is a nice picture, from the Wonkblog, summarizing the best evidence to date on whether cigarette taxes reduce smoking.
The bottom line here is that cigarette taxes slightly reduce smoking among smokers. That slight reduction reflects, in part, those people who quit smoking because it has simply become too expensive. It also includes people who simply smoke fewer cigarettes. But given how addictive tobacco is, it shouldn’t be surprising that the price elasticity of cigarettes is not that great. When you go into withdrawal every time you stop using your product, the price the product becomes a little bit less important.
By contrast, cigarette taxes have an especially large effect on young people. Most importantly, high prices discourage many young people from becoming smokers. In addition, many young people aren’t dealing with the same long-standing addiction that adults have to contend with.
If you like the idea of discouraging kids from smoking, you should be a fan of cigarette taxes.
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