The effect of cigarette taxes on smoking among men and women

Abstract

The literature contains numerous studies that estimate the effect of cigarette taxes on smoking across various population groups. Although the conclusions are split, most US studies find that men are more responsive to cigarette taxes than women. This paper shows that these results are due to the failure to control for state-specific gender gaps in smoking rates that are correlated with cigarette taxes. When gender-specific state fixed effects are included to control for these gaps, the results indicate that women are nearly twice as responsive to cigarette taxes as are men. Since the econometric specification controls for variation in the tax response by household income, it is unlikely to be responsible for the difference. Copyright © 2007 John Wiley & Sons, Ltd.