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PuttingOuttheFires:WillHigherTaxesReducetheOnsetofYouthSmoking?PhilipDeCiccaUniversityofMichiganDonaldKenkelandAlanMathiosCornellUniversityThispaperreexamineswhetherhighercigarettetaxeswillsubstantiallyreduceyouthsmoking.Westudytheimpactoftaxesduringexactlytheperiodinadolescenceinwhichmostsmokersstarttheirhabits.Wefindweakornonexistenttaxeffectsinmodelsoftheonsetofsmokingbetweeneighthandtwelfthgrades,modelsoftheonsetofheavysmokingbetweeneighthandtwelfthgrades,anddiscrete-timehazardmodelsthatincludestatefixedeffects.Wealsoprovideanewperspectiveontherelationshipbetweensmokingandschooling:stu-dentswhoeventuallydropoutofschoolarealreadymorelikelytosmokeintheeighthgrade.I.IntroductionSincethe1964SurgeonGeneral’sreportonthehealthconsequencesofsmoking,theprevalenceofsmokingamongadultshasdecreasedfrom40percenttoabout24percent(U.S.DepartmentofHealthandHumanServices2000b).However,overmostofthe1990sthetrendhasbeenthatmorehighschoolstudentsarebeginningtosmoke.Forex-WethankFrankChaloupka,ThomasDee,WilliamEvans,MichaelGrossman,JeffreyHarris,PaulineIppolito,JoeMulholland,RosaliePacula,participantsatsessionsatthe1998annualmeetingsoftheAmericanEconomicAssociationandtheWesternEconomicAssociation,twoanonymousreferees,andtheeditorsforhelpfulcomments.FinancialsupportfromtheBronfenbrennerLifeCourseCenter,CornellUniversity,andtheNationalCancerInstitute,grantR01-CA77005-01,isgratefullyacknowledged.[JournalofPoliticalEconomy,2002,vol.110,no.1]᭧2002byTheUniversityofChicago.Allrightsreserved.0022-3808/2002/11001-0003$10.00144youthsmoking145ample,datafromtheMonitoringtheFuture(MTF)surveysshowthatthepercentageoftwelfthgraderswhosmokedinthepastmonthin-creasedfairlysteadilyfrom29percentin1990to35percentin1999(Johnston,O’Malley,andBachman2000);indatafromtheYouthRiskBehaviorSurveys(YRBS)oftheCentersforDiseaseControl,theprev-alenceofsmokingamongtwelfthgradersincreasedfrom30percentin1991to43percentin1999(CentersforDiseaseControl2000).Whiletherearesign
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