|
|
|
|
|
|
by Frank Chaloupka Henry Saffer National
Bureau of Economic Research, Inc. The purpose of this paper
is to empirically test the effect that restrictive clean air laws have
on the level of smoking. Restrictive clean air laws refers to the laws
which prohibit smoking in private workplaces as well as in pulbic places.
The data employed in this study consist of a time series of cross sections
of the fifty states of the U.S., and Washingtong D.C., over the time period
from 1975 through 1985. Since states where sentiment is strongly against
cigarettes are more likely to pass a clean air law, endogeneity between
cigarette demand and the clean air law is a problem. A two step estimation
model is used to control for endogeneity. Both a single equation and a
two equation model of cigarette demand were estimated. The single equation
results indicate that a clean air law has a significant negative effect
on cigarette demand. However, the two equation model indicates that cigarette
demand has a significant negative effect on the probability of passing
a clean air law. The results indicate that when endogeneity is controlled
for the clean air law does not have a signifcant effect on cigarette demand.
This does not imply that the enactment of a clean air law would not reduce
the level of smoking if such a law were imposed in all states, but rather
that only states with low levels of smoking are able to pass restrictive
clean air laws.
|
|