Death and Tobacco Taxes

This study analyzes the effects of tobacco excise tax changes on mortality due to heart disease, cancer, and asthma. Reduced form regressions of mortality rates on tax data for the years 1954-1988, with controls for state, year, income, and unobserved persistence, indicate that tax increases lead to statistically significant decreases in mortality. A 10% increase in the tax is projected to save approximately 5200 lives a year.