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Public Policy and the Demand for Smokeless Tobacco

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Project Summary:

In 1986, more than two decades following the release of the first Surgeon General’s report on the health hazards of cigarette smoking, the Advisory Committee to the Surgeon General released a comprehensive review on the health consequences of smokeless tobacco use. The report concluded that a causal relationship exists between snuff use and cancer of the oral cavity and that smokeless tobacco use is linked to an extensive array of other serious health consequences. Despite the 1986 report, a dramatic rise in the use of moist snuff, the most dangerous form of smokeless tobacco, has been observed over the last decade and a half. The upward trend in moist snuff use, coupled with the addictive nature of smokeless tobacco, has caused a great deal of concern among many public health advocates and public policy-makers. Unfortunately, very little is known about the impact of public policy on the demand for smokeless tobacco. Unlike the numerous studies that have been conducted on the determinants of cigarette demand, less than a handful of economic studies have been published on the impact of policy intervention on smokeless tobacco demand. Increases in smokeless tobacco taxes were found to decrease the propensity to use smokeless tobacco in all the previous studies; however, mixed results were found with respect to the impact of cigarette taxes and clean indoor air laws. Our project will significantly add to the existing literature. First, this project will be the first econometric research to examine the impact of the following factors on adolescent smokeless tobacco demand: state tobacco control spending; tobacco purchase, possession, and use laws; clerk intervention laws; photo identification laws; state-level random inspection requirements; establishment of state tobacco authorities; and highly refined clean indoor air laws that control for the magnitude of smoking restrictions in public and private secondary schools, private worksites, health facilities, restaurants, gymnasiums, cultural facilities, public transit facilities, and shopping malls. Second, this research will be the first to examine the impact of state spending on tobacco control programs and the aforementioned refined smoke-free air laws on the demand for smokeless tobacco among adults. Third, this research will be the first to examine state laws that preempt smaller municipalities from creating stronger clean indoor air and youth access laws. Finally, it will be the first research to examine the impact of policy on smokeless tobacco demand via both direct and indirect (peer influences) channels. This project will employ three nationally representative datasets to estimate smokeless tobacco demand equations. The first dataset will contain the 1991 through 2002 surveys of eighth and tenth grade students and the 1992 through 2002 surveys of twelfth grade students from the Monitoring the Future Project. The second dataset contains the 1996 survey of high school students—collected for the project “The Study of Smoking and Tobacco Use Among Young People”—which was funded by the Robert Wood Johnson Foundation. The final dataset will consist of the Sept. 1992, Jan. 1993, May 1993, Sept. 1995, Jan. 1996, May 1996, Sept. 1998, Jan. 1999, May 1999, Sept. 2001, Jan. 2002, and May 2002 Tobacco Use Supplements to the Current Population Survey. We will model the demand for smokeless tobacco using a two-part model in which the propensity to use and the intensity of use are modeled separately. In the first part of the two-part model, a probit or logit specification will be employed to estimate the decision to use smokeless tobacco, whereas in the second part of the model, generalized linear models will be used to estimate the amount chewed by smokeless tobacco users. When estimating models that incorporate peer effects we will employ Amemiya’s two-stage Generalized Least Squares estimator to control for the potential existence of endogeneity between our peer measure and our dependent variables.

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