Research on the Impact of Higher Cigarette Taxes on Maternal Smoking

OBJECTIVES: This study sought to estimate how changes in state cigarette excise taxes affect the smoking behavior of pregnant women. METHODS: Detailed information about mothers and their pregnancy was used to examine the impact of taxes on the propensity of pregnant women to smoke. The 1989 to 1995 Natality Detail Files were used in conducting analyses to assess the impact of taxes on smoking among different subpopulations. RESULTS: Higher cigarette excise taxes reduced smoking rates among pregnant women. A tax hike of $0.55 per pack would reduce maternal smoking by about 22%. Overall, a 10% increase in price would reduce smoking rates by 7%. Estimates for subpopulations suggested that nearly all would be very responsive to tax changes, including the subpopulations with the highest smoking rates. CONCLUSIONS: Smoking rates among pregnant women are responsive to tax hikes.

This study examines whether higher state cigarette taxes can be used to improve birth outcomes. Data on the outcomes of interest are taken from the 1989–1992 Natality Detail files, generating a sample of roughly 10.5 million births. The results suggest that smoking participation among pregnant women declines and average birth weights rise when excise taxes are increased. These results can be used to form an instrumental variables estimate of the impact of smoking on birth weight. This estimate is remarkably close to numbers from a random assignment clinical trial. The smoking participation price elasticity is estimated to be -0.5.