Raising the price of cigarettes reduces smoking especially among kids, one of the world’s leading authorities on the impact of cigarette price on smoking told Nebraskans seeking to prevent tobacco use.

Dr. Frank Chaloupka, Professor of Economics at the University of Illinois at Chicago, spoke April 20 at the Tobacco Free Nebraska state conference in Lincoln about what works to reduce smoking and tobacco use. Dr. Chaloupka is one of the world's foremost experts on the effect of prices and substance control policies in affecting the demands for tobacco, alcohol, and illicit drugs and in the economic analysis of substance use and abuse. 

Particularly among the young, Dr. Chaloupka said, as price goes up, consumption of cigarettes go down. After that, health benefits show up.

Increases in tobacco taxes raise tobacco prices, Dr. Chaloupka told about 80 conference participants, in a presentation available online. As tobacco taxes goes up, the price of tobacco products goes up.

Cigarettes have been taxed for almost 150 years in the United States, according to Dr. Chaloupka. Cigarette taxes were first imposed federally in 1864, at the Civil War. Iowa was the first state to adopt a state cigarette taxes in 1921. In 1947, Nebraska put in place a cigarette tax of three cents per pack. Now every state other than Pennsylvania taxes tobacco products other than cigarettes.

In the 1950s and 1960s nationally, Dr. Chaloupka said, taxes accounted for half of the price of cigarettes. The proportion of the price of a pack of cigarettes then fell to 25 percent. The proportion of the price of a pack of cigarettes in Nebraska is now about 33 percent.

Raising the price of cigarettes makes an impact on smoking in at least three different ways, according to Dr. Chaloupka. When the price of cigarettes is increased, current users try to quit. People who might try smoking are less likely to try it. And those who keep smoking cut back on how much they smoke.

Raising the price of cigarettes is especially effective at keeping kids from starting to smoke and keeping those kids who do smoke from having long-term addictions to smoking, according to Dr. Chaloupka. Kids are more sensitive to the price of cigarettes than adults are. That’s because, in part, kids have less income than adults do. Kids are also more influenced by their peers than adults are. And when kids are kept from smoking, their friends are less likely to smoke, too.

Because kids who smoke are less addicted than are adults who smoke, the price of cigarettes has more impact on them. Kids' choices are more impacted by the current price of cigarettes than by the long-term health impact of smoking, Dr. Chaloupka said.

Increases in the price of cigarettes keep kids from moving from experimenting with smoking to becoming long-term, addicted smokers.

Chaloupka shared two internal RJ Reynolds internal tobacco documents that show that tobacco companies know that the price of cigarettes impacts smoking. One said a buy one, get one free promotion "should be considered an investment program."

The second document said that RJ Reynolds saw the biggest growth in young men smoking where they put in place promotions that reduced price.

Dr. Chaloupka said a proposal to raise the tax on a pack of cigarettes of $1.35 in Nebraska would generate $90 million in revenue, and a proposed tax increase on other tobacco products would generate $10 million in revenue. Every time Nebraska has raised the cigarette tax, he said, state revenue has increased.

The World Health Organization recommends earmarking tobacco tax revenue for programs to promote health and reduce tobacco use, Dr. Chaloupka said.

Dr. Chaloupka is a Distinguished Professor for the Center for Health Services Research at the University of Illinois at Chicago’s School of Public Health.

Dr. Chaloupka has authored over a hundred articles and several book chapters on the effect of prices and substance control policies in affecting the demands for tobacco, alcohol, and illicit drugs.

Dr. Chaloupka, the first UIC Researcher of the Year, directs Impacteen, which investigates tobacco use, obesity, substance abuse and other common threats to teen health. Impacteen is a collaboration funded by the Robert Wood Johnson Foundation. Impacteen is based at the UIC Institute for Health Research and Policy, and collaborators are at RAND, Roswell Park Cancer Institute, and other institutions around the country.