Willard G. Manning

The effects of excise taxes and regulations on cigarette smoking

We estimate a generalized linear model to examine adult and teenage cigarette demand. Out analysis focuses on the extent to which excise taxes and regulations restricting smoking in public places affect cigarette consumption. The adult results indicate that the price elasticity of demand is unstable over time, ranging from 0.06 in 1970 to -0.23 in 1985. These estimates are lower than most found in previous studies. The teenage price elasticity does not differ statistically from the estimates for adults. Additionally, regulations restricting smoking in public places have a significant effect on both adult and teenage cigarette demand.