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CEP discussion paper
The Effect of Bans and Taxes on Passive Smoking
Jérôme Adda and Francesca Cornaglia
October 2009
Paper No' CEPDP0950:
Full Paper (pdf)

JEL Classification: I1; H2

Tags: smoking; taxes; bans

This paper evaluates the effect of smoking bans in public places on the exposure to tobacco smoke of non-smokers and contrasts it with the effect of excise taxes. Exploiting data on cotinine - a metabolite of nicotine - as well as state and time variation in anti-smoking policies across US states, we show that smoking bans in public places can perversely increase the exposure of non-smokers to tobacco smoke by displacing smokers to private places where they contaminate non-smokers, and in particular young children. In contrast, we find that higher taxes are an efficient way to decrease exposure to tobacco smoke, especially for those most exposed. We supplement this analysis by showing that bans have little effect on smoking cessation, and present evidence of displacement from public places using data on time use.