Obesity, smoking, and cigarette taxes: Evidence from the Canadian Community Health Surveys

ObjectivesRecent studies suggest an ambiguous relationship between obesity and cigarette taxes. We employ Canadian data to evaluate the effects of cigarette taxes on smoking and obesity.MethodsWe use a simple reduced form approach and exploit the significant cross-province differences that exist between Eastern and Western Canada to estimate the effects of higher cigarette taxes using aggregate health region and individual level data from the 2003 and 2005 waves of the Canadian Community Health Surveys (CCHS).ResultsOLS estimates based on health regions data suggest that a 10% increase in cigarette taxes is significantly correlated with a 4–5% increase in the percentage of obese population. We also find cigarette tax elasticities of between −0.2 and −0.4 with respect to the percentage of smokers. Estimates from individual level data are similar.ConclusionsIn tandem, these results offer support to the possibility that health benefits from higher cigarette taxes and lower smoking, might be partially offset by a corresponding increase in obesity levels.