The Unintended Health Consequences of Cigarette and Alcohol Taxes

Smoking and drinking account for more than 520,000 deaths annually in the United States, and have been a frequent target of public policy aimed at improving health outcomes. They are also two of the four major risk factors for the world’s deadliest killer: non-communicable diseases. However, our understanding of how smoking and drinking are related to other risk factors for these diseases, such as obesity, is limited. The purpose of this dissertation is to address this lack of understanding. Using the Behavioral Risk Factor Surveillance System and state-level excise taxes on packs of cigarettes and gallons of beer, I estimate the impact of these taxes on Body Mass Index, a measure of body fat used to diagnose obesity, along with their impact on hypertension, diabetes, cholesterol, and arthritis, all obesity-related health conditions. The results indicate that higher taxes on cigarettes and alcohol leads to lower weights, a lower risk of diabetes, and in the case of cigarette taxes, a lower risk of obesity. Higher cigarette taxes lower the rates of hypertension, but higher alcohol taxes have the opposite effect, which is consistent with the j-shaped relationship found in the medical literature. These effects should be considered when changes to these tax rates are considered.