Tobacco Taxes – 2008 Monitoring Update




November 2008

Type of Report

Monitoring Update


Taxation is a policy tool used to increase the retail price of tobacco products thereby decreasing their economic accessibility. Increased price of cigarettes has been shown to be effective in reducing smoking prevalence among young persons. For example, Carpenter and Cook (2008) estimate a $1.00 tax increase would reduce smoking prevalence among U.S. youth from 29.5% to 23.6%. Youth responsiveness to price depends on age, sex, family characteristics, peer influence and school status (student versus dropout) (Auld 2005). Ahmad and Franz (2008) project that if taxes were raised so as to produce a 40% increase in cigarette price, the prevalence of U.S. adult smoking would decrease from 21% in 2004 to 15% in 2025. Among Canadian adults, survey data show a positive relationship between increased cigarette price and the odds of being a nonsmoker and of smoking less (Stephens et al. 2001).

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