New Evidence on Youth Smoking Behavior based on Experimental Price Increases

Hana Ross, Lisa M. Powell, John Tauras and Frank Chaloupka

Contemporary Economic Policy, 2005, vol. 23, issue 2, 195-210

Abstract: The high youth smoking prevalence remains an important public policy challenge into the 21st century. This study applies a unique approach to analyzing the impact of cigarette prices on youth smoking cessation by evaluating reactions among high school students to several alternative hypothetical price increases. It concludes that many young smokers believe that they would quit smoking or decrease their smoking intensity in response to a cigarette price increase. The estimated price elasticity of cessation is between 0.930 and 0.895. The results indicate that youth expect to change their smoking behavior even when the price change is relatively small. However, the behavioral change is most dramatic among those exposed to the largest price increases, suggesting a sustained impact of higher price on cigarette consumption. (JEL I18)

Date: 2005
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