Cigarette Taxes and Smoking Participation: Evidence from Recent Tax Increases in Canada

Sunday Azagba and Mesbah Sharaf
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Sunday Azagba: Department of Economics, Concordia University, 1455 de Maisonneuve Blvd. West, Montréal, Quebec, H3G 1M8, Canada

IJERPH, 2011, vol. 8, issue 5, 1-18

Abstract: Using the Canadian National Population Health Survey and the recent tax variation across Canadian provinces, this paper examines the impact of cigarette taxes on smoking participation. Consistent with the literature, we find evidence of a heterogeneous response to cigarette taxes among different groups of smokers. Contrary to most studies, we find that the middle age group—which constitutes the largest fraction of smokers in our sample—is largely unresponsive to taxes. While cigarette taxes remain popular with policy makers as an anti-smoking measure, identifying the socio-demographic characteristics of smokers who respond differentially to tax increase will help in designing appropriate supplementary measures to reduce smoking.

Keywords: cigarette taxes; smoking participation; elasticity; socio-demographic factors (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2011
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