Death and Tobacco Taxes

In this study I analyze the effects of tobacco excise tax changes on mortality. Reduced-form regressions of mortality rates on tobacco taxes for the years 1954-1988, with controls for state, year, income, alcoholic beverage taxes, age distribution, and unobserved health trends indicate that tax increases lead to statistically significant decreases in smoking related mortality. Evidence on the complementary relationship between alcohol and tobacco as it relates to health outcomes is also presented. A 10% increase in the tobacco tax is projected to save over 5,000 lives a year