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New Study Shows Cigarette Tax Increases are Very Effective at Reducing Smoking Among Pregnant Women

As States Face Budget Shortfalls, Study Highlights Solution that Improves Health, Raises Revenue and Reduces Health Care Costs
October 31, 2001

Washington, DC — As states address growing budget deficits, a new study shows that one of the solutions under consideration – increasing cigarette excise taxes – is also very effective at reducing smoking among pregnant women, improving their health and the health of their infants and reducing medical costs.

According to the study, published in the November issue of the American Journal of Public Health, every 10 percent increase in the price of cigarettes will reduce smoking among pregnant women by 7 percent. The researchers believe that, because pregnant women are already motivated to quit, they are more influenced by higher cigarette prices to do so.

The study also finds that reducing smoking during pregnancy reduces health care costs almost immediately by reducing smoking-related health complications among pregnant women and their infants. The U.S. Surgeon General has found that maternal smoking during pregnancy doubles the chance of an infant being born with low-birth-weight, which often requires expensive health care. Maternal smoking has also been linked to stillbirths, spontaneous abortions, sudden infant death syndrome and other serious illnesses.

The study was released as a growing number of states consider raising their cigarette excise taxes to address large budget deficits and avoid cuts to vital programs. Washington state voters on November 6 will decide a ballot initiative to raise cigarette taxes by 60 cents in order to fund health care and tobacco prevention programs. A coalition of public health groups in New England has been advocating a minimum tax increase of 50 cents per pack in each of the six New England states. Other states are considering similar increases.

The Campaign for Tobacco-Free Kids urged state leaders (and Washington voters) to act on today's study by increasing their state's cigarette excise tax.

'At a time when many states are looking at budget shortfalls, increasing the cigarette tax provides a win-win solution,' said William V. Corr, Executive Vice President of the Campaign. 'Cigarette taxes not only help states balance their budgets, but they are very effective at reducing smoking, saving lives and reducing health care costs. States considering cigarette tax hikes should recognize the immediate benefit of such a policy in reducing the incidence of low-birth-weight babies and other health problems caused by maternal smoking.'

Tobacco is the leading preventable cause of death in the U.S., killing more than 400,000 Americans every year and causing more than $90 billion in health care costs.

Currently, roughly one in eight or more than 500,000 women smoke during pregnancy in the United States. Birth complications caused by smoking during pregnancy or pre-natal exposure to secondhand smoke result in as much as $2 billion in additional health care costs in the U.S. each year.

According to the U.S. Agency for Healthcare Research and Quality, infant respiratory distress syndrome and prematurity/low-birth-weight, which can both be caused by maternal smoking, are two of the three most expensive conditions requiring hospital care.

According to an analysis by the CAMPAIGN FOR TOBACCO-FREE KIDS, a 10 percent increase in the price of cigarettes nationally would result in 175,000 fewer babies being affected by smoking before birth in just five years, saving these children from a potential lifetime of illness. This would also cause a reduction in health care costs over the same time period of roughly $200 million.

Today's study follows numerous others that have documented that cigarette tax or price increases reduce both adult and youth smoking. The general consensus is that every 10 percent increase in the real price of cigarettes will reduce overall cigarette consumption by four percent and reduce youth smoking by about seven percent. In April, a report by the University of Illinois at Chicago and the University of Michigan Institute for Social Research found that tax increases were especially effective at preventing kids from becoming regular, addicted smokers.

All 50 states and the District of Columbia now impose excise taxes on cigarettes, ranging from 2.5 cents per pack in Virginia to $1.11 per pack in New York. But many states haven't raised excise taxes in many years: 36 states have not raised cigarette taxes for at least five years, 17 have not raised them for at least a decade and six have not raised them in at least 20 years. States that have recently done so, such as New York and California, have seen tax revenues increase while cigarette consumption has declined.

The study examined roughly 20 million births between 1989 and 1995 from the Natality Detail File, an annual, state-by-state birth census compiled by the National Center for Health Statistics. The researchers examined the smoking rates of pregnant women before and after a state raised their cigarette tax, and compared these changes to smoking rates in states that had no such change.

The study released today was conducted by William D. Evans, Ph.D., Professor at the University of Maryland and Jeanne S. Ringel, Ph.D., Associate Economist, RAND Corporation and funded by the Substance Abuse Policy Research Program of the Robert Wood Johnson Foundation. View the study online, 'Can higher cigarette taxes improve birth outcomes?'

Get more information on state tobacco excise taxes and their effects on smoking rates and state revenue.