CHICAGO -- A new study by researchers at the University of Illinois at Chicago claims that a large national tax increase "can influence youth tobacco use prevalence within a very short time period."
One anti-tobacco group, the ClearWay Minnesota/Raise It for Health coalition, is already using the report to call for a tobacco price increase in Minnesota of $1.50 per pack.
Implemented on April 1, 2009, the State Children's Health Insurance Program Reauthorization Act (SCHIP) increased the federal tax rate on cigarettes by 61.66 cents per pack (from 39 cents to $1.0066 per pack) and on moist snuff, the most common form of smokeless tobacco, by 92.5 cents per pound (from 58.5 cents to $1.51 per pound). It also increased taxes on other forms of smokeless tobacco.
SCHIP reduced the number of youth smokers by at least 220,000 and the number of youth smokeless tobacco users by at least 135,000 in the first two months, according to the report, published online by the National Bureau of Economic Research.
The study also found that federal tobacco tax revenues increased by 147% in the 12 months following the increase, it said--from $7.1 billion in the 12 months before to $17.5 billion in the 12 months after.
"Adolescents not only respond to tax policy changes, but the speed of their response is fast. The prevalence of smoking and use of smokeless tobacco ... dropped immediately following the tax increase in this study, and statistically significant and meaningful changes could be measured and detected within 30 days of the tax increase, the report said.
The study investigated the changes in youth smoking and smokeless tobacco use rates following the April 2009 federal tobacco tax increases, using data from the Monitoring the Future survey, an annual national survey of 8th, 10th and 12th grade students. Because the survey is conducted from February through May each year, it coincided with the April 1 tobacco tax increase and provided a means to measure the immediate effect.
The percentage of students who reported smoking in the past 30 days dropped between 9.7% and 13.3% immediately following the tax increase, while the percentage who reported using smokeless tobacco dropped between 16% and 24% (because the survey asked about behavior in the past 30 days, the study used three different models, with different cutoff dates, to fully assess the impact of the tax increase).
Because of the tax increase, there were between 220,000 and 287,000 fewer current smokers and between 135,000 and 203,000 fewer smokeless tobacco users among middle and high school students in May 2009, the study estimated.
The study said that it controlled for other factors that influence youth tobacco use, including individual, family and school characteristics as well as state tobacco control measures, including state cigarette taxes, smoke-free air polices and tobacco control funding.
The study "demonstrated that a well-designed, across-the-board tobacco tax policy can deliver both economic and health benefits, and has implications for policymakers at all levels when considering effective tobacco control policies to reduce tobacco use among youth," the researchers wrote.
"This evidence reinforces the need for legislators to increase the price of all tobacco products in Minnesota. The study shows increasing the price of tobacco leads to decreases in youth tobacco use within a very short period of time," said David Willoughby, CEO of ClearWay Minnesota. "We know a tobacco price increase is an effective stop-smoking tool."
Click here to view the full report.