Most states and many cities have in the last 20 years initiated or raised tobacco excise taxes. The fact that both the amount and rate of tax increases differ widely across jurisdictions provides economists valuable data to gauge the effect of these adjustments on smoking behaviors.
Historically, higher cigarette taxes resulted in decreased smoking, especially among youths. In 2008, economists Christopher Carpenter and Philip Cook published a study concluding that “large state tobacco tax increases [from 1991 to 2005] were associated with significant reductions in smoking participation and frequent smoking by [high school students].” (abstract here). They found that a one-dollar increase in the cigarette tax was associated with a 5.9 percent decrease in current (past 30-day) smoking and a 4.1 percent decrease in frequent smoking (in the past 20 days). They used information from the Youth Risk Behavior Surveys for that period.
However, there is little evidence that cigarette tax surges over the last 10 years discouraged youth smoking, according to economists Benjamin Hansen (University of Oregon), Joseph Sabia (San Diego State University) and Daniel Rees (University of Colorado Denver). They looked at state cigarette taxes and youth smoking rates during 2007-2013, and their results were published at the National Bureau of Economic Research (here).
Hansen and colleagues found that a one-dollar increase in the cigarette excise tax was associated with a 0.7 percent increase in current smoking… and a 0.2 percent increase in frequent smoking. Neither result was statistically significant.
I have noted previously that youth smoking rates declined substantially over the past several decades (here). Hansen et al. acknowledge that “youth smoking participation fell precipitously from the late 1990s to the mid-2000s.” It now appears, however, that further increases in cigarette taxes may not produce additional reduction in youth smoking rates.