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Economic impact of tobacco taxes on African Americans

Institution: University of California, San Francisco
Investigator(s): Hai-Yen Sung, Ph.D.
Award Cycle: 2013 (Cycle 22) Grant #: 22RT-0112 Award: $467,178
Subject Area: Disparities /Prevention/ Cessation/ Nicotine Dependence
Award Type: Research Project Awards

Initial Award Abstract

African Americans smoke at the highest rate among all racial and ethnic groups in California, and suffer disproportionately higher rates of smoking-related diseases and greater economic cost of smoking. In order to mitigate the health and economic burden of smoking in African Americans, it is necessary to identify the effectiveness of various tobacco control interventions on the African American population. Raising tobacco taxes is regarded as one of the most effective tools to reduce smoking among the general population. However, there are two major concerns regarding raising tobacco taxes for African Americans. First, African Americans are more likely to smoke menthol cigarettes than the general population. Therefore, they may be less likely to quit or reduce smoking in response to tobacco tax increases compared with the general population. There is little research examining the relationship between the effect of raising tobacco taxes on reducing smoking and the use of menthol cigarettes for African Americans. Secondly, opponents of tobacco taxation policy often claim tobacco taxes are unfair and “regressive” because the financial burden of paying additional taxes will increase disproportionately for low income people and minorities such as African Americans. There is a paucity of empirical research assessing the regressivity of tobacco tax increases among African Americans.

To fill these gaps, we propose to evaluate the effects of increasing cigarette taxes on smoking behavior and quitting behavior among African Americans, and assess whether tobacco tax increases are regressive for the African American community. We propose to accomplish the following aims:

Aim 1. Estimate the responsiveness of smoking prevalence, smoking menthol versus non-menthol cigarettes, and smoking intensity to tobacco tax increases among African Americans by income level, and assess whether the responsiveness of smoking intensity to tobacco tax increases differs by menthol smoking status and by income level.

Aim 2. Estimate the responsiveness of three quitting behaviors (smoking cessation, quit attempts, and intention to quit) to tobacco tax increases among African American smokers, and assess whether the responsiveness differs by menthol smoking status and by income level.

Aim 3. Examine whether African American smokers minimize the price effect from tobacco tax increases by purchasing cheaper cigarettes from other states or the internet (i.e., tax avoidance), and assess whether tax avoidance impacts the price effect differently for menthol versus non-menthol smokers and for smokers with different income levels.

Aim 4. Assess whether tobacco tax increases are regressive among African Americans.

All the aims will be analyzed using secondary data from California and national surveys. For Aims 1-2, multivariable regression models will be used to analyze the relationship between smoking/quitting behavior and cigarette prices, controlling for other confounding factors. In Aim 3, predictors for using tax avoidance strategies will be analyzed with multivariate regression models, and then a variable representing the use of tax avoidance will be included in the models developed from Aims 1-2 to test if tax avoidance negatively affects the price effect on smoking/quitting behaviors. Aim 4 will be assessed by comparing the share of income spent on cigarette taxes and expenditures before and after the 61-cent-per-pack federal excise tax increase in 1999.

This study will produce price elasticity estimates for smoking prevalence, smoking intensity, and cigarette consumption for California African Americans and, to our knowledge, the first estimates of tobacco tax burden for African Americans. This project will provide useful information for California communities and policymakers to understand the full implications of tobacco tax increases on health disparities and social inequity, and will help inform future legislative and initiative campaigns that seek to raise the tobacco tax in California.