Anti-Smoking Policies and Smoker Well-Being: Evidence from Britain*

Abstract

Anti-smoking policies can in theory make smokers better off, by helping smokers with time-inconsistent preferences commit to giving up or reducing the amount they smoke. We use almost 20 years of British individual-level panel data to explore the impact on self-reported psychological well-being of two policy interventions: large increases in tobacco excise taxes and bans on smoking in public places. We use a difference-in-differences approach to compare the effects on well-being for likely smokers and non-smokers. We find robust evidence that increases in tobacco taxes raise the relative well-being of likely smokers. Exploiting regional variation in the timing of the smoking ban across Britain, we find no evidence that it raised smoker well-being. Our findings give some support to the view that tobacco taxes are at least partly justifiable because of the benefits they have for smokers themselves.