DENVER –Raising cigarette taxes has the unwanted effect of increasing alcohol consumption, including binge and heavy drinking.
This relationship is an example of what economists call a cross-price or substitution effect. And it’s something policy makers need to be cognizant of, Deborah L. McLellan said at the meeting.
She analyzed 6 years of cross-sectional data from the Centers for Disease Control and Prevention’s annual Behavioral Risk Factor Surveillance System surveys carried out in 2001-2006. Interviews were conducted with 1,323,758 adults living in nearly every state in the country.
Her multivariate logistic regression analysis concluded that for every 1 dollar increase in the price of a pack of cigarettes, the ranks of current smokers drop by a highly significant 5%. That’s consistent with the classic economic theory of consumer demand, which holds that raising the price of a commodity decreases consumption.
But the analysis also showed that a 1 dollar per pack price increase was associated with a 29% increase in the odds of having consumed alcohol during the last month, a 12% increase in binge drinking, and a 10% increase in heavy drinking, defined in the study as more than one drink per day in women and more than two in men.
"I want to be clear that the message here is not ‘Let’s stop increasing cigarette taxes.’ That’s not my message at all. But this study is contributing to other literature out there that’s finding there are substitution effects, so advocates and policy makers and indeed researchers need to prepare for some of these unintended consequences of tobacco taxation policy," said Ms. McLellan of the Heller School for Social Policy and Management at Brandeis University, Waltham, Mass.
"There needs to be more collaboration between tobacco control advocates and those who work in alcohol prevention. We all know we tend to work in our silos, but people certainly do drink and smoke, and we need to catch up with them," she added.
The researcher noted that alcohol and tobacco use carry "staggering" human and economic costs. It’s estimated that 438,000 deaths occur annually from tobacco in the United States, and 98,000 because of alcohol. Twenty percent of Americans were smokers in 2006 and 51% were drinkers, including 23% who were binge drinkers and 7% who were heavy drinkers. Twenty-two percent of Americans were co-users.
She declared having no financial conflicts regarding the study, which she is conducting for her dissertation.