Smoking bans have been widely introduced in recent years in an effort to reduce non-smokers' exposure to tobacco smoke. Jérôme Adda and Francesca Cornaglia evaluate the effect of these restrictions - and of taxes on cigarettes - on the incidence of passive smoking and, in particular, their unintended consequences for children.smoking, taxes, bans

Francesca Cornaglia

Jérôme Adda

English

Research Papers in Economics

CentrePiece Summer 2010
22
A
substantial body of
medical research has
demonstrated the dangers
of exposure to
environmental tobacco
smoke. Passive smoking has been linked
to a number of serious illnesses, such as
lung cancer and heart disease in adults.
And it particularly affects the health of
young children and babies, causing
asthma, bronchitis and sudden infant
death syndrome. In the United States, the
Environmental Protection Agency
estimates that exposure to smoke causes
about 200,000 lower respiratory tract
infections in young children each year,
resulting in 10,000 hospitalisations. 
Public intervention uses two
instruments to try to discourage smoking:
directly, by limiting or banning smoking in
public places; and indirectly, by raising
taxes on cigarettes. Economic evaluations
of the impact of these policies have mainly
focused on the latter. For example, our
research has shown that taxes reduce the
number of cigarettes smoked, but smokers
compensate by smoking each cigarette
more intensively (Adda and Cornaglia,
2006).
Few studies have considered the effect
of bans, and those that do focus on the
impact on smokers. One example shows
that workplace bans decrease the
prevalence of smoking among those who
work (Evans et al, 1999). But there is
hardly any evidence on the effectiveness
of either raising taxes or restricting
smoking in reducing exposure to tobacco
smoke among non-smokers.
Public debate on the effectiveness of
different measures has intensified, and
policies to ban smoking are often justified
on the grounds of protecting non-smokers
rather than smokers. But there is to our
knowledge no study evaluating the
response of passive smoking to the
growing set of regulations and clean air
legislation passed in the last decade or to
changes in excise taxes.
The emergence of 
smoking bans
Just as in the UK, widespread smoking
bans and smoking restrictions are a
relatively novel phenomenon in the United
States. Some attempts to ban smoking
and the sale of cigarettes were made
during Prohibition in the 1920s, when 15
states banned cigarette sales. But these
laws were repealed by the end of that
decade.
Half a century later, as research
progressively made clear the effect of
tobacco smoke, support for smoking bans
Smoking bans have been widely introduced in
recent years in an effort to reduce non-smokers’
exposure to tobacco smoke. Jérôme Adda and
Francesca Cornaglia evaluate the effect of
these restrictions – and of taxes on cigarettes –
on the incidence of passive smoking and, in
particular, their unintended consequences 
for children.
Passive smoking:
the effect of bans and taxesCentrePiece Summer 2010
23
in public places has steadily risen. The
proportion of individuals supporting a
total ban in restaurants increased from
20% in 1985 to 54% in 2005. And local
authorities and governments have come
under pressure from anti-tobacco groups
and the general public to limit the
exposure of non-smokers and generally to
discourage smoking.
The first smoking bans to be
introduced in the United States were in
place in Minnesota in the mid-1970s. They
required restaurants to have a non-
smoking section, while exempting bars.
During the 1970s and the 1980s, smoking
bans were progressively imposed, usually
by requiring separate areas for smokers
and non-smokers, as in airlines in 1973.
During the 1990s, US smoking bans
became more stringent, with the
imposition of total bans in workplaces,
public places, restaurants and bars. These
were pioneered by municipalities and
counties, mainly in California in the early
1990s. The first states to impose such a
ban were California and Utah with 100%
smoke-free restaurants in 1995.
The impact of bans on
passive smokers
Our research uses data on smoking bans
obtained from the American Non
Smokers’ Rights Foundation, which
collected the date of introduction of
smoking bans and whether these were
introduced at city, county or state level.
We merge these data with information 
on state level excise taxes. Figure 1 plots
the time trend of these policies at the
national level. 
Excise taxes have risen from around 30
cents per pack in the late 1980s to more
than 80 cents in 2006, with a sharp rise
from 2001 onwards. Hardly any bans were
in place before the mid-1990s. But in
2006, about 40% of the population was
living in an area with a smoking ban in
workplaces or with smoking bans in bars
and restaurants.
We have a direct measure of passive
smoking, which has not previously been
used in economic research. The
concentration of cotinine (a chemical
naturally derived from nicotine) in blood,
saliva or urine samples is a good marker of
exposure to environmental smoke (Jarvis et
al, 2000). Using this indicator, we can
evaluate the effect of bans and taxes on
smokers and non-smokers and, in
particular, their unintended consequences
for children. 
Analysing the effect of smoking
regulation on smoking, time use and
passive smoking, we show that smoking
bans can have two distinct effects on non-
smokers’ exposure to tobacco smoke: they
decrease exposure in public places but can
lead to a perverse increase in exposure by
displacing smoking towards private areas. 
We find that during the last two
decades, bans in workplaces, bars and
restaurants have led to a relative increase
in the exposure of non-smokers,
particularly those who share a household
with smokers. 
We hypothesise that such bans
displace smoking to places where non-
smokers are more exposed. To support
these findings, we provide evidence of the
Figure 1:
Bans and excise taxes by year (US average) Children who
share a 
house with
smokers suffer
particularly
adversely from
smoking bans
0
20%
10%
30%
40% $0.80
$0.60
$0.40
$0.20
2005 2000 1995 1990 1985 1980
■ Workplace ban
■ Ban in bars and restaurants
■ Excise tax (right axis)
P
r
o
p
o
r
t
i
o
n
 
o
f
 
U
S
 
p
o
p
u
l
a
t
i
o
n
 
c
o
v
e
r
e
d
 
b
y
 
b
a
n
E
x
c
i
s
e
 
t
a
x
 
(
U
S
 
$
)
Year
Smoking bans in
workplaces, bars
and restaurants
have led to a
relative increase
in the exposure
of non-smokersCentrePiece Summer 2010
24
effect of bans on smoking behaviour and
how individuals spend their time in various
locations.
We show that there is no clear
evidence that smoking bans have a causal
effect either on the prevalence of smoking
or on smoking cessation and attempted
quits. Using time use data, we show
evidence of a displacement of smokers
away from bars and restaurants when
smoke-free laws are passed. The evidence
therefore supports the hypothesis of a
displacement of smokers to places shared
with non-smokers, such as watching TV
with the children, who then get more
exposure to tobacco smoke.
In contrast, we find that changes in
tobacco taxes have a significant effect of
reducing exposure to environmental
smoke. The effect is particularly sizable for
children who are exposed to their parents’
smoke. This suggests that excise taxes are
an efficient tool to curb passive smoking
as smokers cut down on cigarettes
smoked in the company of non-smokers,
especially children.
The value of bans for
reducing passive smoking
Our results question the usefulness of
bans in reducing smoking exposure for
non-smokers. More precisely, we show
that policies aimed at reducing exposure
to tobacco smoke induce changes in
behaviour, which can offset these policies.
It is therefore of crucial importance to
understand how smoking behaviour is
affected by regulations. To date, economic
research has not gone far enough in
studying smoking behaviour to be able to
evaluate their effect on non-smokers. It is
not enough to show that smokers react to
prices or taxes. Information on which
particular cigarette is cut down during the
day, where smokers smoke and with
whom are also relevant.
There are complex interactions at play
and considerable variation in their effects
across socio-economic groups. Using a
biomarker such as cotinine concentrations
is a very direct way of evaluating the
overall effect of interventions and the
induced changes in behaviour.
On the policy side, it is clearly
important when designing public policies
aimed at reducing tobacco exposure of
non-smokers to distinguish between the
different public places where bans are
introduced. Displacing smoking towards
places where non-smokers spend time is
particularly inefficient.
The displacement may also increase
health disparities across socio-economic
groups and in particular among children, 
a vulnerable group with little choice to
avoid contamination. Children are
particularly prone to tobacco-related
diseases, and poor health in childhood has
lasting consequences not only for future
health but also for the accumulation of
human capital. 
Governments in many countries are
under pressure to limit passive smoking.
Some pressure groups can be very vocal
about these issues and suggest bold and
radical reforms. Their point of view is
laudable but too simplistic in the sense
that they do not take account of how
public policies can generate perverse
incentives and effects. Our study provides
insights on how to design optimal policies
to curb passive smoking. 
Excise taxes
lead smokers to
cut down
smoking in the
company of
non-smokers,
especially
children
This article summarises ‘The Effect 
of Bans and Taxes on Passive Smoking’ 
by Jérôme Adda and Francesca Cornaglia,
CEP Discussion Paper No. 950
(http://cep.lse.ac.uk/pubs/download/
dp0950.pdf).
Jérôme Adda is at the European University
Institute, Florence, and the Institute for Fiscal
Studies. Francesca Cornaglia is a research
associate in CEP’s labour markets and
wellbeing programmes and a lecturer at
Queen Mary University of London.
Further reading
Jérôme Adda and Francesca Cornaglia (2006)
‘Taxes, Cigarette Consumption and Smoking
Intensity’, American Economic Review 96(4):
1013-28.
William Evans, Matthew Farrelly and Edward
Montgomery (1999) ‘Do Workplace Smoking
Bans Reduce Smoking?’, American Economic
Review 89(4): 728-47.
Martin Jarvis et al (2000) ‘Children’s Exposure
to Passive Smoking in England since the
1980s: Cotinine Evidence from Population
Surveys’, British Medical Journal 321: 343-45.

Passive smoking: the effect of bans and taxes

http://cep.lse.ac.uk/pubs/download/cp315.pdf

Passive smoking: the effect of bans and taxes

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