Prevention Approach 1: Economic Interventions

The primary goals of economic interventions as a prevention approach are to raise the price of tobacco products through increased taxes and thereby prevent youth from taking up smoking, delay the age at which they might begin, and decrease the level of tobacco consumption.

Rationale

Adolescents, who have limited financial resources, are sensitive to price increases. Higher prices should reduce the likelihood of adolescent tobacco purchases.

Objectives of the Studies Reviewed

• To determine whether adolescent demand for cigarettes fluctuates in response to decreases and increases in the Federal excise tax

• To compare trends in tobacco consumption in States where there are tax increases with trends in States where there are no tax increases

• To identify the effect of increases in Federal tobacco excise taxes on the number of adolescent smokers

Activities of the Studies Reviewed

• Increase in taxes on cigarettes through the Federal legislative process
• Increase in taxes on cigarettes through State legislation

Lessons Learned From Reviewed Evidence

• Tobacco tax increases are effective in reducing the prevalence of tobacco use by adolescents. Efforts to increase State taxes on tobacco products have included the mobilization of community groups, other groups, and legislators. Depending on the State, taxes can be increased through either the initiative or the legislative process.

• Although tobacco tax increases will decrease the prevalence of adolescent tobacco use, other prevention activities must be utilized to sustain such decreases. Tobacco tax increases are most effective within a comprehensive, multicomponent prevention program.

• The benefits of increases in tobacco taxes, such as reduction in adolescent cigarette use, will shrink as inflation erodes the real value of the tax increase--unless the excise tax is defaulted so that the nominal tax rate (expressed in cents per pack) rises in step with prices. defaulting tobacco taxes to the consumer price default or to the wholesale price of cigarettes would make permanent the public health gains of higher taxes.