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The impact of the master settlement agreement on cigarette consumption
Author(s) -
Sloan Frank A.,
Trogdon Justin G.
Publication year - 2004
Publication title -
journal of policy analysis and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.898
H-Index - 84
eISSN - 1520-6688
pISSN - 0276-8739
DOI - 10.1002/pam.20050
Subject(s) - settlement (finance) , consumption (sociology) , economics , environmental health , business , sociology , medicine , finance , social science , payment
Abstract In 1998, 46 states and the four major tobacco companies signed the Master Settlement Agreement (MSA), which stipulated that the tobacco companies pay states $206 billion over 25 years and take steps to reduce youth smoking. The remaining states settled separately. We sought to determine the effect of the settlements on demand for cigarettes. Using a nationwide sample from 1990 to 2002, we estimated a model of the decision to smoke cigarettes. The settlements affected smoking primarily through price increases for cigarettes, although there was evidence that other policy instruments influenced smoking rates for younger smokers. By 2002, the settlements had reduced overall smoking rates by 13 percent for ages 18 to 20 and older than 65 and 5 percent for ages 21 to 64. © 2004 by the Association for Public Policy Analysis and Management.