Estimating the impact of state cigarette tax rates on smoking behavior: Addressing endogeneity using a natural experiment

Introduction: Cigarette excise taxes are a well-established policy lever for reducing tobacco use. However, estimating the effect of taxes on smoking behavior can be confounded by endogeneity concerns such as selection. This study leverages a unique natural experiment -compulsory relocation of U.S. military service members to installations - to estimate the relationship between state cigarette taxes and smoking behavior without concerns about selection into environments. Methods: The current study uses data from the Department of Defense's 2011 Health-Related Behaviors Survey and 2011 state cigarette excise taxes from the CDC STATE System. Logistic and Poisson regression analyses estimate the cross-sectional associations between state cigarette excise taxes and the following smoking behaviors: current cigarette smoking, frequency of smoking, heaviness of consumption, and cigarette cessation among individuals who smoked while at the current installation. Results: Higher taxes are associated with lower odds of current cigarette smoking (AOR = 0.94; 95 % CI: 0.89-0.98), fewer smoking days per month among current cigarette smokers (IRR = 0.98, 95 % CI 0.97-0.996), and higher likelihood of quitting smoking among individuals who had smoked at their current installation (AOR = 1.14, 95 % CI 1.05-1.25). Taxes are not associated with the number of cigarettes smoked per day among current smokers. Conclusions: Exogenous assignment to installations in states with higher cigarette taxes is associated with lower likelihood of smoking and greater likelihood of quitting. Findings provide novel evidence in support of a causal impact of cigarette taxes on lower smoking levels among adults.

Automated summary

This study uses a unique natural experiment of compulsory relocation of U.S. military service members to estimate the relationship between state cigarette taxes and smoking behavior. The results show that higher taxes are associated with lower smoking rates and higher quit rates, providing novel evidence for the causal impact of cigarette taxes on adult smoking levels.