Prices and Addictive Propensities: An Analysis of Adolescent Smoking Behavior

Mir M Ali, University of Toledo

A primary policy concern in advocating cigarette prices as a mechanism to reduce adolescent smoking is whether higher prices will prevent them from becoming smokers as adults or will merely delay the initiation. In this paper we examine how prices that individuals face during their adolescent years affect their lifetime propensities of addiction. By estimating a longitudinal model of addiction we find that although prices may exert some short-run influence in terms of delaying initiation, but such an effect will diminish as a transition into adulthood is made. However, the influence that peers and family (parents smoking status and parent-child relationship) exert on individuals during adolescence remains till adulthood. This indicates that reliance on prices alone may not yield the desired policy results. Additionally, we find that state policies that are designed to restrict adolescent access to cigarettes and discourage its consumption exert an influence that also persists till adulthood.