Learning Objectives: Compare cigarette consumption in states with various excise tax rates
Abstract: Research indicates that policy initiatives are one of the most effective interventions within comprehensive tobacco control programs. Specifically, increasing state excise taxes effectively decreases cigarette consumption among high-risk populations such as young adults. In addition to generating tax revenue, increasing state excise taxes decreases cigarette consumption and provides substantial health benefits.
This study examines the relationship between retail price adjusted for inflation and state per capita consumption of cigarettes. Eight states which includes Illinois, New York, Indiana, Wisconsin, Nebraska, Georgia, Missouri, and Pennsylvania were selected for analysis based on the following criteria: amount of master settlement dollars allotted for tobacco control and prevention and excise tax activity from 1990 to 2000. Cigarette price was adjusted using the consumer price index. The three major results of the study are as follows. 1) Increasing excise taxes is related to decreases in per capita consumption of cigarettes. 2) Cigarette retail prices steadily increased from 1990 to 2000; however, when adjusted for inflation, prices remained fairly steady until 1998. Retail prices increased notably after the Master Settlement Agreement in 1998. 3) States with very high excise taxes (NY) show a more significant impact on state per capita consumption patterns.
Overall, increasing excise taxes is a very important aspect of tobacco control and prevention; however, understanding how inflation affects cigarette price is crucial.
NCTH2002_PriceAdvocacy.ppt (703.0 kb)
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