Preprint version. Public Finance Review, Volume 35, November 1, 2007, pages 689-709.
California is often considered the model for tobacco-control programs due to its early adoption of comprehensive programs aimed at lowering tobacco consumption. Tobacco control began when voters approved the California Tobacco Tax and Health Promotion Act of 1988. More than $2 billion has been spent on tobacco-control in California since 1988. The findings of this article indicate that tobacco-control spending is a significant factor for the widening gap between consumption in the United States and in California only in equations that exclude cigarette prices and smoking bans as control variables. When significant, however, estimates suggest that, for every $1 increase in tobacco-control spending per capita, the sales gap widens by only 0.11 to 0.18 cigarette packs per capita, or roughly 2 to 4 cigarettes per capita. This study suggests that future research should address the complexity of interactions among tobacco-control programs, cigarette prices, and smoking bans.