The Price of Smoking in Black and White

In today’s New York Times, Anthony Ramirez reports on the sharp decline in smoking in New York City. According to a study that interviewed 10,000 city residents, only 17.5% of the adult population now smokes, compared to 21.6% in 2002.

What accounts for this huge drop? The article offers three potential causes: anti-tobacco TV ads, a smoking ban in restaurants, and a hefty tax increase on cigarettes.

My money is on the tax increases. According to the article, the average price of a pack of cigarettes in New York is now $6.85. Much of the recent research on the subject shows that tax increases indeed have a strong effect on cigarette consumption, especially among young smokers. While the Times article doesn’t deal with underage smoking, it does show a massive drop among 18-to-24-year-olds: from 23.8% in 2002 to 15.5% in 2006.

It’s also interesting to note that white people in New York continue to smoke more than black people. Here are the numbers:

Whites in 2002: 23.9%

Whites in 2006: 19.8%

Blacks in 2002: 20.8%

Blacks in 2006: 17.7%

It could be that the cost of cigarettes, and the recent taxes in particular, affect blacks more severely than whites since blacks’ per capita income is significantly lower than whites’. Our friend Roland Fryer, the new “chief equality officer” of New York schools, is on a lifelong mission to shrink the black-white achievement gap. At least blacks are on the right side of the smoking gap. On the other hand, it’s been argued that blacks have a harder time quitting because of their preference for menthols.

The only downside I can see for the massive smoking decline in New York (unless you’re a big tobacco shareholder) is that the drop in smoking may be helping people get fatter. But don’t worry, presumptive presidential candidate Mayor Bloomberg is working on that, too.


EmilyAnabel

The white/black difference in smoking in NY may be biased by the presence of significant international populations. NYC whites from overseas are more likely to be from Europe, where smoking is significantly more common than the US, and NYC blacks from overseas are more likely to be from Carribbean and African countries, which don't seem to have as big a smoking problem as European countries.

steveo99

As a former smoker, the biggest factor in my quitting is the inability to smoke in bars and restaurants. In fact, when I go abroad where cigarettes are more expensive, I often pick the habit back up temporarily.

Cigarettes are still cheap post tax increases relative to a drink out or even most cheap meals in NYC. The true costs are non-financial... such as standing alone outside in the snow late at night while your friends are having the time of their life.

dngshouse

dont be so quick to give the taxes credit for lowering the amount of smoking. in chicago the taxes are ridiculous, $7-8 per pack. however, next door in indiana they are $3/pack. so people in new york probably outsource for cheaper smokes and buy in bulk like people in chicago. This explains why the smoke tax revenue went down 3 million in NY.

For young smokers, they dont buy in bulk like older people. there are tons of 16-20 year olds who hide their smoking from parents and cant risk having 10 packs laying around. So they feel the taxes more and decrease their smoking.

econ2econ

I agree that the bans have more of an effect than you think, especially among the young crowd, which are more likely to be bar-goers and are more likely to be "social smokers". I know for me (a young bar-goer who likes to smoke in bars), when the full Chicago/IL ban goes into place in 2008, it will cut my smoking back by a LOT, and will probably make it easy for me to quit. If you ask any smoker, I'm sure 90% of them will tell you they want to quit. Something like a ban on ALL public places can be the catalyst for that.

lermit

If you weren't busy looking at other people's bad habits you'd make a good habit of your place and the whereabouts of your vices. Then, it used to be about gambling. And the money.

.lermit ('not quality of life for you, smokey')

Dave Child

Hah! $7? Try smoking in the UK (as I did until about 9 months ago) - a pack of smokes is £5.50 over here. Or $10-11.

From my own experience, I would hazard a guess that the cause is simply social acceptance dropping. Partly because of bans, and partly because of education. People are starting to see nicotine for what it is - an addictive drug - and less as what it's not - a pleasure.

derfer

As the England smoking ban approaches there was an article on the BBC news web site (that I can't find at the minute) about the effect of the Scottish smoking ban that has been running for a while.

Allegedly there has been an increase in 'casual' smoking as people who go out with friends who smoke don't like being left alone when all thier friends go outside for a cigarette!

There was also an alleged increase in related child illnesses as more parents are smoking at home as they can't smoke when they go out!

abhimehr

"It could be that the cost of cigarettes, and the recent taxes in particular, affect blacks more severely than whites since blacks' per capita income is significantly lower than whites'."

Don't agree here. After the tax increase the fall in Whites' consumption was over 4 points and in Blacks' under 3 points. Which means, Blacks smoked less earlier and although there has been a decline, its not as much as in the case of Whites. No ?

An aside question: When (which season) were both the studies done ? People tend to smoke more in Winters that Summers. Were both 2002 and 2006 stats taken during the same month ?

dreck

Both the smoking ban in restaurants and the tax increases raise the cost of smoking, so I'm inclined to believe it's a combination of the two. The tax is merely a more explicit increase in cost. Bans on smoking, while they generate no revenue, raise the cost of smoking by requiring more time of the smoker who would ordinarily smoke in a restaurant.

I'm sure the studies were done in the same month. If not, we might as well throw the data out the window.

Robert Gorell

Thanks for blogging this, Stephen. I was reading this (way too) early this morning and hoping you guys would respond.

Any thoughts on the other Freakonom-esque piece in today's NYTimes about the homicide wave in Oakland?

Crash

I'm not sure I'd credit the tax increases either; I vaguely remember from a college economics class that cigarettes are a surprisingly price-inelastic commodity. Are there any good studies one way or the other?

lermit

What would you expect if you only look at price elasticity?

Income as a factor in the determination of price in elasticity, beyond real terms, even if you look at it from the owners' side, might tend to be a factor. You can correct it, type it and publisht. I'm on vacation.

Rephrasing: I mean, on a tutor's salary I couldn't smoke in the UK but I could very well eat pasta in the UK. That made sense?

.lermit

suitedaces

Read about this in yesterday's Metro daily edition, where they attributed the drop more on the effective anti-smoking ad with man talking through his open air pipe in the throat. They did a great job in raising public awareness. Everyone knows smoking is bad, and there's also a lot of social pressure involved with New Yorkers quiting.

mhsiegel14

Why is there not a fourth potential cause of this? People are making wiser decisions about smoking, particularly young people. Is it impossible that younger people are more knowledgeable and smoke less? I think a breakdown by age would be far more illuminating than a breakdown by race. Income might reveal something as well - there is a proven anti-correlation between smoking and income. There are also a lot more incentives and help in quitting smoking. Many employers now offer quit-smoking programs.

To be honest, I kind of resent the implicit assumption her that human beings are a bunch of mindless empty vessels who only make the proper decisions when they are guided by taxes, bans or TV ads. It reflects a fundamentally statist view that government - and only government - can make people better. Don't the smokers who've quit deserve *any* credit? I quite smoking six years ago . . . just because I was sick of it.

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tmitsss

Tim Harford has some interesting economic points to make on the justifications for the Smoking ban in English Pubs in his Undercover Economist column.

http://tinyurl.com/yvqk8k

elle

But are the differences between the two groups (blacks versus whites) statistically significant? I'd like to see the t-test results. :-D

Bill L

Have you guys really dug into the statistics about the famous decline in smoking in recent years (like you did with the crime statistics in your book)? Are these numbers (the decline) actually observed, or just self reported in surveys?

Could it be that people are lying more about their smoking habits, because it isn't cool to smoke these days, and the decline isn't as great?

I know this is not a scientific observation, but I swear I see more people smoking in their cars on the way to work every morning, their cigarrette just out their window the whole time so as to not "smell", than I would expect to see given the statistics.

Also, lot's of young people (college to late twenties) smoke socially.

These folks probably would not admit to smoking in a survey.

I would not be surprised if a lot more people smoke but just don't admit it these days. It is just not perceived as cool anymore. It actually has a perceived trashy, lower class connotation for many.

Bill L.

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EmilyAnabel

The white/black difference in smoking in NY may be biased by the presence of significant international populations. NYC whites from overseas are more likely to be from Europe, where smoking is significantly more common than the US, and NYC blacks from overseas are more likely to be from Carribbean and African countries, which don't seem to have as big a smoking problem as European countries.

steveo99

As a former smoker, the biggest factor in my quitting is the inability to smoke in bars and restaurants. In fact, when I go abroad where cigarettes are more expensive, I often pick the habit back up temporarily.

Cigarettes are still cheap post tax increases relative to a drink out or even most cheap meals in NYC. The true costs are non-financial... such as standing alone outside in the snow late at night while your friends are having the time of their life.

dngshouse

dont be so quick to give the taxes credit for lowering the amount of smoking. in chicago the taxes are ridiculous, $7-8 per pack. however, next door in indiana they are $3/pack. so people in new york probably outsource for cheaper smokes and buy in bulk like people in chicago. This explains why the smoke tax revenue went down 3 million in NY.

For young smokers, they dont buy in bulk like older people. there are tons of 16-20 year olds who hide their smoking from parents and cant risk having 10 packs laying around. So they feel the taxes more and decrease their smoking.