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Price, Clean Indoor
Air Laws, and Cigarette Smoking: Evidence from Longitudinal Data for
Young Adults National
Bureau of Economic Research, Inc. The upward trend in cigarette
smoking among teenagers throughout the 1990's has spurred a great deal
of interest on how to discourage young people from smoking. This paper
attempts to inform policy makers by providing evidence on the effects
cigarette prices (which can be increased through cigarette excise taxes)
and restrictions on smoking in public places and private worksites have
on the use of cigarettes by young adults. Data on cigarette use are taken
from the 1976 through 1993 surveys of high school seniors as part of the
Monitoring the Future program. Seven follow-ups are conducted on each
senior class and therefore each individual is sampled up to eight times.
Site-specific data on cigarette prices and clean indoor air laws are added
to the survey data. Individual fixed effects methods are used to estimate
smoking participation and conditional demand equations. The results indicate
that increases in cigarette prices would lead to significant reductions
in both the number of people smoking and the frequency with which individuals
smoke. The estimated overall average price elasticity of demand is -0.791.
In addition, restrictions on smoking in public places and private worksites
are found to be effective in reducing both the intensity and the propensity
to smoke.
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