Copyright 2000 The McGraw-Hill Companies, Inc.  

Business Week
September 4, 2000
SECTION: ECONOMIC TRENDS; Number 3697; Pg. 34

LENGTH: 206 words

HEADLINE: HOW TO STOP KIDS' SMOKING

BYLINE: BY CHARLES J. WHALEN

HIGHLIGHT:
Raising prices would be a big help

BODY:
Raising cigarette taxes can reduce smoking among teenagers even more than previously thought, say economists Donna B. Gilleskie and Koleman S. Strumpf of the University of North Carolina in a new working paper published by the National Bureau of Economic Research. Using a new model and national data from a survey tracking upwards of 25,000 eighth-graders since 1988, the authors were able to estimate how much higher prices influence the decision to not start smoking.

According to their model, raising taxes by $ 1 per pack would reduce the likelihood of smoking by eighth graders by half, a substantially bigger drop than predicted by conventional models. Looking at the price effect on young people is essential, they add, because early-youth smoking decisions have a powerful long-term impact on future smoking behavior.

In fact, calculating the cumulative effects of early smoking decisions is where their model differs, say Gilleskie and Strumpf. That's because few researchers have used such models -- and none has tracked the same youths. An updated look at the sample will be available next year, enabling them to extend their research to gauge the effect of cigarette taxes on young adults' smoking habits.  
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LOAD-DATE: August 31, 2000