Empirical Economics

, Volume 42, Issue 3, pp 1079-1095

First online:

Cigarette demand and effectiveness of U.S. smoking control policies: state-level evidence for more than half a century

  • Rajeev K. GoelAffiliated withDepartment of Economics, Illinois State University
  • , Michael A. NelsonAffiliated withDepartment of Economics, University of Akron Email author 

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Using state-level U.S. data over 1956–2008 this paper examines the demand for cigarettes. The long data span enables us to compare and evaluate the effectiveness of various policies and to examine cigarette demand across individual states. Our results show cigarette demand to be price inelastic, smoking-habit effects to be strong, income effects to be small, and border price effects can be significant. These findings are quite robust across alternate model specifications. None of the three smoking control policies considered (Fairness Doctrine, Broadcast Ban, and Master Settlement Agreement) were shown to be effective in curbing overall smoking, although most were effective in a few states. Policy implications are discussed.


Cigarettes Smoking Master Settlement Agreement Elasticity Demand

JEL Classification

D12 I18 H20