through physical barriers at the point of purchase), and the promotion of tobacco products at the point of sale and through advertising in periodicals, promotional events, coupons, and other means. Increased tobacco costs and restricted access to the products are associated with reduced consumption and increased cessation (CDC, 2009a). As tobacco restrictions have increased along some dimensions, such as cigarette taxes and smoke-free legislation, manufacturers have responded with increasingly innovative tobacco products, particularly varieties of smokeless tobacco. As elaborated below, tobacco prices remain among the most effective public-policy levers available both to reduce tobacco use and to fund tobacco-control efforts, such as counteradvertising.
Higher prices reduce tobacco consumption by affecting initiation (Slater et al., 2007), cessation (IOM, 2007), and the intensity of smoking (IOM, 2007). Research has shown that the use of taxes to combat tobacco consumption is one of the most effective tobacco-control policies (Warner, 2007). Tobacco prices are usually raised through increases in state excise taxes; however, in 2009, the federal government increased the federal tax3 on cigarettes from $0.39 to $1.0066 per pack to pay for the expanded State Children’s Health Insurance Program (NCI, 2009). The most relevant evidence on tobacco prices and taxes that is applicable to DoD is summarized below. DoD sells tobacco products at its commissaries and exchanges, typically below the prices of the same products sold commercially outside military installations. VA no longer sells tobacco products in its canteens or at its facilities.
Overwhelming evidence demonstrates that people are less likely to smoke and to smoke fewer cigarettes when cigarette prices are high (Chaloupka and Warner, 2000; Gallet and List, 2003; IOM, 2007; NIH, 2006). Econometric analyses show consistently that a 10% rise in cigarette prices reduces consumption by 3–5% (Chaloupka, 1999; Chaloupka and Warner, 2000; Gallet and List, 2003). Given high rates of smoking relapse and initiation in military personnel after basic training (Klesges et al., 2001, 2006), the evidence on the smoking behavior of young adults is particularly relevant. For example, one study suggests that older youths (17–20 years old) are more responsive to price than younger youths (Gruber and Zinman, 2001). A mounting body of rigorous evidence indicates that smoking behavior is more responsive to price among young adults than among older adults (Chaloupka and Warner, 2000; Chaloupka and Wechsler, 1997; Gruber and Zinman,