Anti-smoking policies and smoker well-being: Evidence from Britain

Anti-smoking policies can in theory make smokers better o , by helping smokers with time-inconsistent preferences commit to giving up or reducing the amount they smoke. We use almost 20 years of British individual-level panel data to explore the impact on self-reported psychological well-being of two policy interventions: large real-terms increases in tobacco excise taxes and bans on smoking in public places. We use a di erence-in-di erences approach to compare the e ects on well-being for smokers and nonsmokers. Smoking behaviour is likely to be in uenced by policy interventions, leading to a selection problem if outcomes are compared across current smokers and non-smokers. We consider di erent ways of grouping individuals into `treatment'and `control' groups based on demographic characteristics and observed smoking histories. We nd fairly robust evidence that increases in tobacco taxes raise the relative well-being of likely smokers. Exploiting regional variation in the timing of the smoking ban across British regions, we also nd some evidence that it raised smoker well-being, though the e ect is not robust to the measure of well-being. The economic signi cance of the e ects also appears to be quite modest. Our ndings therefore give cautious support to the view that such interventions are at least partly justi able because of the bene ts they have for smokers themselves. JEL: D03, D12, H23, H31