Higher Cigarette Taxes Don't Deter Smoking

A new Canadian study found that smokers are largely unfazed by tax hikes on cigarettes.

July 18, 2011

NEW YORK - A new Canadian study reveals that higher taxes do not prompt smokers to quit.

Researchers from Concordia University in Montreal examined data collected by Statistics Canada, specifically the National Population Health Survey conducted from 1998-99 to 2008-09, and analyzed three categories of daily smokers: People aged 12 to 24, 25 to 44 and 45 to 65. Of the age groups, the price increases don??t persuade wealthier smokers or those aged 25 to 44 to quit.

"Contrary to most studies, we find that the middle-aged group, which constitutes the largest fraction of smokers in our sample, is largely unresponsive to taxes," said study author Sunday Azagba in a university news release. "While cigarette taxes remain popular with policy makers as a key anti-smoking measure, their effectiveness largely depends on how people respond to them."

Study authors also noted that there is a conventional belief among policymakers that higher cigarette prices will reduce smoking among target populations such as high school students. "Overall, it was smokers from lower socioeconomic groups who are more price-responsive than those from higher socioeconomic groups," added co-author Mesbah Sharaf. "If there is a 10 percent increase in taxes then smoking participation will fall by about 2.3 percent." ??

The research team also found that people with a post-secondary education were less likely to smoke than those with less than a high school education. "If smokers are sophisticated about their self-control and responsive to prices, taxes could act as a self-control incentive for them," said Azagba. "Higher taxes for some people, when consumption of addictive goods is driven by cues, may be counterproductive."

In Canada, cigarettes are taxed by the federal, provincial and territorial governments. While smoking rates in Canada have been declining for more than two decades, noted Azagba, "The lowest percentage of smokers can be found among women who are married, older, with high income and more education."

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