Postprint version. Published in Applied Economics, Volume 42, Issue 11, April 1, 2010, pages 1331-1343.
Effectiveness of tobacco control programmes in reducing smoking prevalence during 2001 to 2005 is examined. Tobacco control spending is found to exert no significant effects on smoking prevalence across the 50 states. Cigarette prices are found to lower prevalence of daily smokers, but exert no effect on nondaily smoking prevalence. Several reasons are suggested for why these results might conflict with previous research. These include that most previous studies examined two states (California and Massachusetts) with long-standing tobacco control programmes and that most studies examined periods in which many of the states in their samples did not actively fund their programmes. Another reason may be that, unlike most previous studies, this study controls for the possibility that tobacco control spending is endogenous when, for example, states exhibiting relatively low smoking prevalence are also states with relatively high distaste for smoking and accordingly fund tobacco control programmes more generously. A negative relation between tobacco control spending and smoking prevalence does not necessarily indicate that higher spending causes lower prevalence when spending is endogenously determined.