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New Evidence on Youth Smoking Behavior Based on Experimental Price Increases

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Abstract:

The high prevalence of smoking among American teenagers 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 reported to be between 0.889 and 0.818. In addition, the study predicts the strength of behavioral responses to price increases of various magnitudes. The results indicate that youths expect to change their smoking behavior even when the price change is relatively small. However, the behavioral change is most dramatic among the group exposed to the largest price increases suggesting a sustained impact of higher price on cigarette consumption. Large cigarette tax increases would result in both substantially higher quitting rates and a considerable drop in smoking intensity.