Youth are more sensitive to price changes in cigarettes than adults

Abstract

Virtually all smoking begins in our population's youth and remains as a habit into those smokers' elder years. If we desire to halt smoking in its infancy, we should seek to deter and induce cessation in the youth years. It has been cited that taxation is an effective means to deter smoking at all ages, particularly efficacious in the youth population. This paper explores the merits of this method of preventative medicine, and intends to investigate differences between the price elasticity of cigarette demand between various cohorts, particularly the adult versus the youth population. We use a two-variable log-log, ordinary least-squares econometric regression to determine the extent that price alterations have on participation rates and quantity smoked. Our results show that youth are quite responsive to price increases showing a decrease of 14 percent prevalence in smoking for a 10 percent increase in price; whereas, the adult population is relatively less responsive to such price changes, exhibiting nearly a 2 percent decrease in prevalence for a 10 percent increase in price. We conclude that taxation is an effective means of socially-enacted preventative medicine in deterring youth smoking.