The effect of a major cigarette price change on smoking behavior in California: A zero-inflated negative binomial model

Mei Ling Sheu, Teh Wei Hu, Theodore E. Keeler, Michael Ong, Hai Yen Sung

Research output: Contribution to journalArticle

56 Citations (Scopus)

Abstract

The objective of this paper is to determine the price sensitivity of smokers in their consumption of cigarettes, using evidence from a major increase in California cigarette prices due to Proposition 10 and the Tobacco Settlement. The study sample consists of individual survey data from Behavioral Risk Factor Survey (BRFS) and price data from the Bureau of Labor Statistics between 1996 and 1999. A zero-inflated negative binomial (ZINB) regression model was applied for the statistical analysis. The statistical model showed that price did not have an effect on reducing the estimated prevalence of smoking. However, it indicated that among smokers the price elasticity was at the level of -0.46 and statistically significant. Since smoking prevalence is significantly lower than it was a decade ago, price increases are becoming less effective as an inducement for hard-core smokers to quit, although they may respond by decreasing consumption. For those who only smoke occasionally (many of them being young adults) price increases alone may not be an effective inducement to quit smoking. Additional underlying behavioral factors need to be identified so that more effective anti-smoking strategies can be developed.

Original languageEnglish
Pages (from-to)781-791
Number of pages11
JournalHealth Economics
Volume13
Issue number8
DOIs
Publication statusPublished - Aug 2004

Fingerprint

Statistical Models
Tobacco Products
smoking
Smoking
labor statistics
price elasticity
Elasticity
statistical analysis
nicotine
young adult
Binomial model
Cigarettes
Price changes
Smoking behavior
Negative binomial
Smoke
Tobacco
Young Adult
regression
evidence

Keywords

  • Cigarette consumption
  • Price change
  • Smoking prevalence
  • Tobacco tax

ASJC Scopus subject areas

  • Nursing(all)
  • Economics and Econometrics
  • Health(social science)
  • Health Professions(all)

Cite this

The effect of a major cigarette price change on smoking behavior in California : A zero-inflated negative binomial model. / Sheu, Mei Ling; Hu, Teh Wei; Keeler, Theodore E.; Ong, Michael; Sung, Hai Yen.

In: Health Economics, Vol. 13, No. 8, 08.2004, p. 781-791.

Research output: Contribution to journalArticle

Sheu, Mei Ling ; Hu, Teh Wei ; Keeler, Theodore E. ; Ong, Michael ; Sung, Hai Yen. / The effect of a major cigarette price change on smoking behavior in California : A zero-inflated negative binomial model. In: Health Economics. 2004 ; Vol. 13, No. 8. pp. 781-791.
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