Social Learning Theory, Cigarette Taxes and Adolescent Smoking Behavior

In this paper we evaluate the effectiveness of cigarette taxes as a mechanism to reduce smoking rates among adolescents. In our model, we categorize individuals by their smoking frequencies and intensities instead of relying on the widely used dichotomous measure of smoking. Using data of a nationally representative sample of adolescents, we use an endogenity corrected model with school-level fixed effects to obtain our estimates. Moving beyond the conventional definition of smoking to a definition that recognizes the complex nature of addiction by categorizing smoking into various stages and also by controlling for peer and family effects together, we learn that adolescents are not necessarily the most responsive to taxes. Influence from peers and family plays a more significant role in influencing adolescent smoking.