The Effect of Bans and Taxes on Passive Smoking

This paper evaluates the effect of smoking bans in public places on the exposure to tobacco smoke of non-smokers and contrasts it with the effect of excise taxes. Exploiting data on cotininea metabolite of nicotineas well as state and time variation in anti-smoking policies across US states, we show that smoking bans in public places can perversely increase the exposure of non-smokers to tobacco smoke by displacing smokers to private places where they contaminate non smokers, and in particular young children. In contrast, we find that higher taxes are an efficient way to decrease exposure to tobacco smoke, especially in those most exposed. ∗ [email protected] and [email protected]. We are grateful to a number of seminar participants and to David Card, Ken Chay, Christian Dustmann, Steve Machin, Costas Meghir, and Imran Rasul for helpful discussions and comments and to William Evans for supplying us with data on US tobacco prices and taxes. Funding through the ESRC is gratefully acknowledged. Francesca Cornaglia acknowledges the British Academy’s support through the award of the postdoctoral fellowship.