DOES SPENDING MORE ON TOBACCO CONTROL PROGRAMS MAKE ECONOMIC SENSE? AN INCREMENTAL BENEFIT-COST ANALYSIS USING PANEL DATA

Authors

  • SUDIP CHATTOPADHYAY,

    1. Chattopadhyay: Department of Economics, San Francisco State University, 1600 Holloway Avenue, San Francisco, CA 94132. Phone +1 415 338 1447, Fax +1 415 338 1057, E-mail sudip@sfsu.edu
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  • DAVID R. PIEPER

    1. Pieper: Department of Geography, University of California, Berkeley, Berkeley, CA 94720. E-mail davidpieper@berkeley.edu
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    • The authors would like to thank the two anonymous reviewers for their helpful comments, which have significantly improved the paper from its earlier version. Data for this research are all from published sources and the findings of this research have no potential conflict with any agency.


Abstract

This paper presents a benefit-cost analysis of the ongoing, state-level tobacco prevention and control programs in the United States. Using state-level panel data for the years 1991–2007, the study applies several variants of econometric modeling approaches to estimate the state-level tobacco demand. The paper finds a statistically significant evidence of a sustained and steadily increasing long-run impact of the tobacco control program spending on cigarette demand in states. The study also shows that, if individual states follow the Best Practices funding guidelines, potential future annual benefits of the tobacco control program can be as high as 14–20 times the cost of program implementation. (JEL C2, H5, I1)

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