In a survey released this morning by Scioto Analysis, Ohio economists were split on what they believed the impacts of raising Ohio’s cigarette tax to match Michigan’s would be. In December, the State Legislature voted to override Governor DeWine’s veto of a bill that would restrict cities from regulating flavored tobacco products. Given that Ohio has the fourth highest rate of cigarette use according to the CDC, lawmakers might consider taxes as a market-based method of regulation.
Of the 23 economists surveyed, 15 agreed that the increase in taxes would lead to significantly higher prices for consumers. However, only eight economists believed that these prices would lead to significant reductions in cigarette use.
Kathryn Wilson from Kent State agreed that this tax increase would reduce cigarette use, and wrote “Studies have shown that higher cigarette prices reduce the likelihood that youth will begin smoking and reduce cigarette consumption among youth. The results for adults are generally not as strong. I agree that the tax would likely result in a reduction in cigarette consumption, particularly among youth, but I don't know that the tax increase would be enough to significantly reduce consumption overall.”
Curtis Reynolds from Kent State disagreed with this statement, saying “Research is clear that demand for cigarettes is very inelastic, so increases in prices does not lower cigarette consumption much (an older literature suggested larger decreases for teenagers but more recent studies find smaller effects). Depending on which estimates you look at, this tax might reduce cigarette consumption by about 1-5%. And there is strong evidence of tax avoidance (casual smuggling from other states) which would further lower the effects towards zero.”
In addition to the market effects of a cigarette tax, 12 economists agreed that increasing the tax would lead to some health benefits for Ohioans. As Robert Gitter from Ohio Wesleyan wrote, “any reduction in smoking, no matter how small, will lead to fewer health problems.”
The Ohio Economic Experts Panel is a panel of over 40 Ohio Economists from over 30 Ohio higher educational institutions conducted by Scioto Analysis. The goal of the Ohio Economic Experts Panel is to promote better policy outcomes by providing policymakers, policy influencers, and the public with the informed opinions of Ohio’s leading economists. Individual responses to all surveys can be found here.