Fiscal and Policy Implications of Selling Pipe Tobacco for Roll-Your-Own Cigarettes in the United States

The Federal excise tax was increased for tobacco products on April 1, 2009. While excise tax rates prior to the increase were the same for roll-your-own (RYO) and pipe tobacco, the tax on pipe tobacco was $21.95 per pound less than the tax on RYO tobacco after the increase. Subsequently, tobacco manufacturers began labeling loose tobacco as pipe tobacco and marketing these products to RYO consumers at a lower price. Retailers refer to these products as “dual purpose" or “dual use" pipe tobacco.Data on tobacco tax collections comes from the Alcohol and Tobacco Tax and Trade Bureau. Joinpoint software was used to identify changes in sales trends. Estimates were generated for the amount of pipe tobacco sold for RYO use and for Federal and state tax revenue lost through August 2011.Approximately 45 million pounds of pipe tobacco has been sold for RYO use from April 2009 to August 2011, lowering state and Federal revenue by over$1.3 billion.Marketing pipe tobacco as “dual purpose" and selling it for RYO use provides an opportunity to avoid paying higher cigarette prices. This blunts the public health impact excise tax increases would otherwise have on reducing tobacco use through higher prices. Selling pipe tobacco for RYO use decreases state and Federal revenue and also avoids regulations on flavored tobacco, banned descriptors, prohibitions on shipping, and reporting requirements

Early Birds in Day Care: The Social Gradient in Starting Day Care and Children's Non-Cognitive Skills

In recent years, almost all children below school age in Western industrialized countries have some experience of attending day care institutions. However, the age at which children enter day care and therefore the overall time spent in day carevaries substantially. We investigate the potential impact of later day care entry on the social and emotional behaviour of children, one important aspect of non-cognitive skills. Based on the English sample of the Millennium Cohort Study, we analyse the effects on children's development at the age of five and seven, using propensity score techniques. We find clear evidence of effects on children's development at the age of seven: Later day care entry increases children's peer-problems and reduces prosocial behaviour. We find that boys with low educated mothers and from families with a household income below the poverty line are most strongly affected

Public Smoking Bans, Youth Access Laws, and Cigarette Sales at Vending Machines

Tobacco control policies have proliferated in many countries in recent years, in particular youth access laws and public smoking bans. The effectiveness of youth access laws is still disputed, however, as are the costs of public smoking bans to the hospitality industry. Using a unique data set on cigarette sales at more than 100k vending machines that provides first objective evidence on the outgoing and customer behavior of smokers, we study both outcome dimensions by investigating several recent tobacco control measures in Germany. We find a large negative effect on cigarette sales of a nation-wide introduction of devices for electronic age verification in cigarette vending machines, particularly at machines placed outdoors and in localities that are strongly frequented by youths. In contrast, there is no evidence that a country-wide smoking ban in federal buildings affected cigarette sales in these premises and only weak evidence that a recent rise in the minimum legal smoking age affected cigarette purchases by youths. Finally, state-level smoking bans appear to have reduced indoor sales of cigarettes at vending machines, especially in bars. However, the magnitude of the estimated effect is rather modest, suggesting that businesses in the hospitality industry are unlikely to have been affected severely.Das vorliegende Papier untersucht anhand von Umsatzdaten an Zigarettenautomaten die Wirkungen von vier verschiedenen Maßnahmen zur Kontrolle bzw. Begrenzung des Zigarettenkonsums in Deutschland: die elektronische Alterskennung an Automaten (Januar 2007), die Anhebung des Mindestalters für den Erwerb und Konsum von Zigaretten von 16 auf 18 Jahren (September 2007), das Rauchverbot in Einrichtungen des Bundes (ebenfalls September 2007) sowie Rauchverbote in der Gastronomie auf Länderebene (zwischen August 2007 und Juli 2008). Die Ergebnisse zeigen einen starken Rückgang des Zigarettenabsatzes an Automaten in Folge der Einführung der elektronischen Alterskennung, besonders an Automaten im Außenbereich und in Einrichtungen, die stark von Jugendlichen frequentiert werden. Im Gegensatz findet sich jedoch keine Evidenz dafür, dass das Rauchverbot in Einrichtungen des Bundes zu einem Rückgang des Absatzes an Zigarettenautomaten in diesen Einrichtungen geführt hat. Auch gibt es nur schwache Evidenz für einen Einfluss der Anhebung des Mindestalters auf den Erwerb von Zigaretten durch Jugendliche. Rauchverbote auf Bundeslandebene hingegen haben den Zigarettenabsatz an Automaten im Innenbereich reduziert, besonders in Kneipen. Die moderate Größe dieses Effektes legt jedoch den Schluss nahe, dass Gastronomiebetriebe durch die Rauchverbote keine starken Umsatzeinbußen erfuhren

Does Job Loss Make You Smoke and Gain Weight?

This paper estimates the effect of involuntary job loss on smoking behavior and body weight using German Socio-Economic Panel Study data. Baseline nonsmokers are more likely to start smoking due to job loss, while smokers do not intensify their smoking. Job loss increases body weight slightly, but significantly. In particular, single individuals as well as those with lower health or socioeconomic status prior to job loss exhibit high rates of smoking initiation. The applied regression-adjusted semiparametric difference-in-difference matching strategy is robust against selection on observables and time-invariant unobservables. This paper provides an indirect test showing that the identifying assumption is not violated in the difference-in-difference estimator. The findings are robust over various matching specifications and different choices of the conditioning variables

What is Learned from Longitudinal Studies of Advertising and Youth Drinking and Smoking? A Critical Assessment

This paper assesses the methodology employed in longitudinal studies of advertising and youth drinking and smoking behaviors. These studies often are given a causal interpretation in the psychology and public health literatures. Four issues are examined from the perspective of econometrics. First, specification and validation of empirical models. Second, empirical issues associated with measures of advertising receptivity and exposure. Third, potential endogeneity of receptivity and exposure variables. Fourth, sample selection bias in baseline and follow-up surveys. Longitudinal studies reviewed include 20 studies of youth drinking and 26 studies of youth smoking. Substantial shortcomings are found in the studies, which preclude a causal interpretation