Long-Term Effects of Tobacco Prices Faced by Adolescents

Abstract

Tobacco taxes in Canada varied markedly across time and across regions in the early 1990s. We exploit this variation to estimate the long reach of prices faced in adolescence on smoking behavior roughly a decade later in early to mid-adulthood. Results from a variety of econometric approaches suggest that there is a small but detectable long-run effect of price faced during adolescence. A 10% increase in prices faced during adolescence, holding contemporaneous prices constant, leads to roughly a 1% reduction in adult smoking propensity and intensity. The results are somewhat sensitive to specification and to how price during adolescence is measured.