Preuenfing Tobacco Use Among Young Peq+

.

m-sage appeal relies on production elemtm& .qwh ,\?;
choice of actors, clothing, and music. To &J ?;u,\~~~,~.
pro&ztion need not be Costly (Flynn trt al. t-2). In
fact, small, independent producers may by luwtu.~t+.
if pr&u&on quality is maintained.

Campaigns should be intense enough to t'~uuh\ im-
pact (Flay, DiTecco, Schlegell980). Tele\iti,>n nlLY?;-
Sages should be aired at times when your\< ?~~~l+,
are most likely to be watching-and ti,r h-?;t t++
cienq, at times when they are the prim.~rl\, \-ic\\-\.=;.
particularly during the reruns of popular ~~rimtLtin,,,
shows during after-school hours, since thtw ~h~~,,~
tend to charge relatively low rates for ~~d\-\~~isin+..
Adequate reach and frequency should h\ .lchic\-l,i
by using both paid and public-service time (F.tic~.,~,~
McKenna, Roman0 1990). The statewide mt\Ii,\ c,,~,,-
paigns in California, Minnesota, and htichis,j1\ ,In,
based on paid advertising funded by earn~.~rL\~ t.llt,
Paid media appear necessary t0 achieve s;\llvt.lnti,\\
exposure to targeted youth populations .\t L\\\tim,\l
ties of the day. Campaigns should havt\ s\ltfi<i<*nt
duration (or else should run continuously) tip in\lx,L.t
youth throughout the critical years for srnk&inS ,,,,-
set (Worden et al. 1988).

.

Campaigns can be cost-effective. Evidence from the
University of Vermont study (nynn et al. 1992), which
achieved a 35 percent reduction in Weekly smoking,
irtdicataj that the cost per person for the estimated
2,605 young people (7 percent of the total population
aged 10 through 15 in the broadcast area [U.S. Depart-
ment of C&nerce 1992a, b, C; R.R. Bowker 19921)

who may have been prevented from smoking by the
four-year intervention WCS estimated to be $233 when
the costs of production and paid advertising were
included, and $77 when paid advertising alone was
included. These costs compare favorably to those
incurred in various smoking cessation programs
(Altman et al. 1983, in which costs ranged from $22 to
$339 per successful quitter. Far the estimated 37,212
students h~ grades 5 through 10 residing in areas
receiving this media campaign, the annual cost per
student for the total campaign was $4.08; for paid
advertising only, the cost per student was $1.34. Com-
parable total campaign costs per teenager in Mince-
sota, with a 95 percent audience reach but fewer
exposures than in the Vermont study, were $1.07 in
1989 and $1.14 in 1990 (Cdey 1992). Costs can also be
contained if media spots are shared across states or
reused after several years.

public Policies to Prevent Tobacco Use AIllong young People

Effect of General-Public Smoking
Restrictions on Young People
Introduction

Public smoking restrictions are an import,lnt L~jnl-
ponent of the social environment that supports non-
smoking behavior (Rigotti 1989; Simonich 111,(, 1.
Wasserman et al. 1991; Emont et al. 1993). Thc*v <\,ntri\L
ute to adolescents' percephons that nonsmc)kins is
normative and create a social climate where smoking is
not acceptable. Restrictions convey the additional mcs-
sage that smoking creates health problems for smukcm
and nonsmokers alike. Finally, rehiw to the d~gnv of
compliance, thee restrictions reduce the numtwr of
opportunities to smoke and thus make smoking lr%s
convenient. The net effect of these restrictions should lw
to reduce the psychosocial benefits of smoking to ,~d~pl~%-
cents, making it less likely that those who exprimcnt
with smoking will continue to smoke and ~woI~~~ de-
pendent (USDHHS 1991).

History of Public Smoking Restrictions

  AS documented in the 1986 and 1989 Surgeon
Gene&`s VJrts on smoking and health, restrictions on
smoking in public before the 1970s were motivated prirna-
rily by concern over smoking as a potential fire hazard and
byothersafetc'concems,suchasdistractionswhiledriving
(USDHI+j l&&a, 1989). In the 197% new k!gislation was
enacted, pti@ally in the form of state-level clean-indoor-
air am, to ~~cmxt the nonsmoking public from the health
hazards md +~y&tl irritation caused by smoking. Dur-
ing the l%Qs, 31 states passed legislation that introduced
mk&ons on sn~o&ng in public places and private facili-
ties, such s w~~kp~ces or restaurants, or that extended
existing rq-&tiom (USDHHS 1989). This and ensuing
legislation was fueled by the accumulation of well-
documented, -de&publicized evidence of the disease risks
asso(-iated M=II smoking (Rigotti 1989; USDHHS 1991).
Duringthe1~,t&a~ntroleffotisp~adtothelocal
level. By 1 w_, a total of45 state% the District of Columbia,
and at least ji vt of cities with a population of 25,000

Prevention   151

161-235 95 -6


Surgeon General's Report

or greater had adopted some restrictions on smoking in
public places (Rigotti and Pashos 1991; Coahtion on Smok-
ingORHealth1992). However,onIyafractionoftheseIaws
could be considered comprehensive enough to provide
meaningful protection against environmental tobacco
smoke, and municipal laws have tended to be more exten-
sive and stronger than state laws (Rigotti and Pashos 1991;
USDHHS 1991). The 1990s have seen the introduction of
biIIssponsoredbythetobaccoindustrythatinch.ideIimited
state restrictions on smoking in public but that also pre-
empt more restrictive current or subsequent local ordi-
nances. States with complete or partial preemption include
Florida, Pennsylvania, Virginia, Nevada, IUinois, New Jer-
sey, Iowa, and Oklahoma (Rigotti and Pashos 1991; Ameri-
cans for Nonsmokers' Rights 1992~).

Smoking Restrictions in the School

  Schools can create powerful environments for pro-
moting a nonsmoking norm. Educational organizations
such as the National School Boards Association ([NSBA]
1987,1989) and the Alliance for Health, Physical Educa-
tion, Recreation, and Dance (1991) have endorsed the use
of "tobacco-free policies" as a key component of efforts to
create smoke-free schools.

  In 1988, the NSBA, in collaboration with the ACS,
the American Heart Association, and the American Lung
Association, conducted a random-sample mail survey of
school smoking policies in 2,000 of the more than 15,000
public school districts in the United States; 1,310 (66
percent) of the districts responded (NSBA 1989). Results
from a similar, earlier NSBA study (NSBA 1987; USDHHS
1991) allowed an examination of policy trends over time.
In 1988,95 percent of aII responding school districts had
a written policy or regulation on tobacco smoking in
schools.  AII of the written policies in the 1988 survey
included restrictions on smoking by students; 96 percent
addressed smoking by faculty, staff, and administration;
and 92 percent addressed smoking by other adults. Of the
districts responding to the 1988 survey, 17 percent
totally banned smoking; that is, smoking by anyone was
prohibited both on school premises and at school func-
tions. Restrictions on adult smoking on school premises
and at school functions more than doubled during the
two years separating the surveys. For example, the
proportionof districts that prohibited smoking by school
personnel in school buildings increased from 11 percent
in 1986 to 24 percent in 1988. In the 1988 survey, comph-
ante by school personnel was described as "excellent" or
"good" by 87 percent of districts with written policies,
and 86 percent reported similar levels of compliance
among students. Moreover, school districts with poIi-
ties that banned smoking altogether reported greater

adherence to their policies than did districts with less
stringent restrictions.

  In October 1989, ASTHO conducted a survey of
state health department personnel that included infor-
mation on policies that address tobacco use (CDC 1991b).
Thirty-nine states were found to have state-level qt.&+
tions that restricted tobacco use in schools. Twenty-
seven states banned smoking for students; eight states
banned smoking for both students and staff @XC 1991b).
Since that survey, at least two more states have passed
laws that prohibit any tobacco use in their schools.

  Research on topics such as the effect of school
smoking-restriction policies on student and adult to-
bacco use, attitudes toward tobacco use, and compliance
with policy remains limited. Reports from national sur-
veys (NSBA 1989) and from schools within Minnesota
Winnesota Department of Health 1991) indicate that
restrictive smoking policies can gain widespread sup
port and acceptance. Since 1985, Minnesota school dis-
tricts have participated in intensive efforts to reduce
tobacco use among adolescents (Griffin, Loeffler, KaseII
1988). Since beginning these efforts, the number of Min-
nesota school districts with tobacco-free policies for stu-
dents, staff, and visitors increased from 3 to 361 school
districts (83 percent of aII districts). In May 1989, the
Minnesota Department of Health conducted a survey in
districts that had a tobacco-free policy in place for six or
more months. Survey results indicated that a large ma-
jority of school districts had experienced broad accep
tance and support for tobacco-free policies, a large number
of perceived benefits, and few problems. For example, 62
percent of the districts reported having no problems
implementing their tobacco-free policies, and 98 percent
of aII tobacco-free districts reported that they did not
intend to weaken their policy (Minnesota Department of
Health 1991).

  Pentz, Dwyer, et al. (1989) examined the impact of
school smoking policies on over 4,000 adolescents in 23
schoois in California. The schools' written smoking poIi-
ties were evaluated on whether they banned smoking on
school grounds, restricted students from leaving school
grounds, banned smoking near school, and included an
education program on smoking prevention. Schools that
had policies in aU of these areas and emphasized preven-
tion and cessation had significantly lower smoking rates
than did schools with fewer policies and less emphasis
on smoking prevention.

  Drawing on reviews of existing policy and on pre-
liminary evaluative research, several authors (Rashak et
al. 1986; Brink et al. 1988; DiFranza 1989; NSBA 1989)
have identified the following characteristics of effective
school smoking policies.

152 Prevention


pra)enting Tobacco Use Among Young Peopie

Smoking on school grounds, on school buses, and
at school-sponsored events is prohibited for stu-
dents, school personnel, and visitors.
Schools vigorously enforce the policy and consis-
tently administer penalties for violations.
Disciplinary measures for noncompliance with
policy are educational as well as punitive.
Policy development includes active collaboration
with teacher, student, and parent groups to give
direction and build support for tobacco-free schools.
All components of a school's smoking policy, in-
cluding consequences for violations, are communi-
cated in written and oral form to students, staff, and
visitors.

o Districtwide educational programs addressing the
prevention of tobacco use are initiated or expanded as
part of the policy implementation process.
o Smokingcessation programs or other incentives are
developed for students, school personnel, and if pos-
sible, the public.

o Programs are periodically evaluated to provide infor-
mation on acceptance and effectiveness of policy.
o Schools do not accept any contributions from the
tobacco industry, including direct financial support
and materials paid for by, or produced by or for, the
tobacco industry.

Other Public Smoking Restrictions That Affect Youth

  Smoking or tobacco use by minors (as opposed to
the selling of tobacco products to minors) is prohibited
by at least 21 states (USDHHS 1992b). In general, these
laws are remnants of a previous era of smoking restric-
tions; for example, the Minnesota law dates back to the
early 1900s (Minnesota Statutes Annotated 1987). Such
laws are rarely enforced except when young people con-
gregating to smoke constitute a nuisance.

  Few smoking restrictions, other than school poli-
cies, are adopted specifically because of their effect on
children. Major exceptions include restrictions on smok-
ing in daycare facilities and restrictions on smoking by
minors. In August 1992, legislation was introduced by
U.S. Representative Richard Durbin and U.S. Senator
Frank Lautenberg that would require federally funded
programs to establish a nonsmoking policy wherever
they provide direct services to children under age five
(U.S. Congress 1992).

  Restrictions on daycare facilities in particular are
important because it has been estimated that in 198813
percent of U.S. children aged five years and younger

(about 2.8 million1 were being regularly cared for by a
nonrelative in a home or facility other than the child's
home (Dawson and Cain 1990). As of July 1992, 40
states restricted smoking to some extent in child daycare
facilities, but only Alaska, Arkansas, Michigan, and
Minnesota required at least one category of daycare
facility to be smoke-free indoors (Coalition on Smoking
OR Health 1992; Nelson, Sacks, Addiss 1993). In Min-
nesota, however, these laws apply only to licensed
daycare centers and do not extend to licensed or unli-
censed family daycare homes. In a 1990 national survey
of licensed daycare centers, nearly 55 percent of centers
reported that they were smoke-free indoors only; an-
other 26 percent were smoke-free indoors and outdoors
(Nelson, Sacks, Addiss 1993). Other public smoking
restrictions are relevant to children because young
people frequent specific locations and are influenced
either directly by a law or policy, or indirectly by the
norms of these institutions, including sports facilities,
restaurants, and shopping malls.

  Smoke-free sports facilities help break the connection
between tobacco and sports that has been fostered by the
tobacco industry (see "Public Entertainment' in Chapter 5).
The ciinxtors of many university and professional-league
stadiums and arenas have voluntarily made their facilities
smoke-free. These facilities include Oriole Park at Camden
Yards in Baltimore, Maryland; Tiger Stadium in Detroit,
Michigan; the Hubert H. Humphrey Metrodome in Minne-
apolis, Minnesota; Texas Stadium in Irving, Texas; and
basketballarenasinIJhoenix,Arizona;salt IAkecity,utah;
and Minneapolis, Minnesota (Americans for Nonsmokers'
Rights 1992a, b, c). At least 23 states restrict smoking in
gymnasiums or arenas as part of their legislation for clean
indoor air (Coalition on Smoking OR Health 1992).

  Restaurants are among the most frequented public
facilities in the United States, and some restaurants make
specific marketing appeals to children or adolescents
(Simonich 1991). By 1989,44 states had included some
restrictions on smoking in restaurants, and 51 percent of
cities with a population of 25,ooO or greater had passed
local ordinances restricting smoking in restaurants (Coa-
lition on Smoking OR Health 1992; Rigotti and Pashos
1991; Americans for Nonsmokers' Rights 1992a). The
1992 publication of the Environmental Protection
Agency's findings on the effects of environmental to-
bacco smoke on children have led to calls for fast-food
restaurants to eliminate their smoking sections (Melamed
1992; Action on Smoking and Health 1992); several have
responded with pilot programs.

  A new ordinance (effective since June 1992) that
prohibits smoking in enclosed private malls in Howard
County, Maryland, is believed to be the first of its kind in
the United States (SmokeFree Educational Services, Inc.
1992). However, in Minnesota and elsewhere, a number

Prevention   253


Surgeon General's Report

of malls have recently voluntarily adopted smoke-free
policies (O'Brien 1991). Maine, New York, and Washing-
ton State specifically mention shopping centers in their
legislation for clean indoor air (Coalition on Smoking OR
Health 1992). As public places, shopping malls should
be subject to existing state and local restrictions on smok-
ing in public places, but the extent to which such laws are
enforced for these facilities is unknown.

Effect of Smoking Restrictions on Adolescent
Tobacco Use

  Rigotti and Pashos (1991) concluded that an in-
verse relationship exists between smoking restrictions
and smoking rates; the direction of causality, if any,
between smoking rates and smoking restrictions could
not be determined from the evidence available. Addi-
tional evidence is provided by two recent econometric.
studies. Simonich (1991) modeled actual cigarette con-
sumption per capita for ages 14 and older as a function of
price, income, advertising, and product differentiation;
the model also included the nicotine content of ciga-
rettes. The data set consisted of quarterly per capita
consumption from 1959 through 1983. Siionich (1991)
concluded that each time the proportion of all smokers in
the United States who lived in states with smoking re
strictions on restaurants or workplaces increased by 10
percent, the consumption of cigarettes would decrease
by 6.5 percent. A study by Wasserman et al. (1991)
specifically examined teenage cigarette smoking. Smok-,
ing data from the Second National Health and Nutrition
Examination Survey were used to determine cigarette
consumption. A state regulation index was constructed
that was similar to one described in the Surgeon General's
1986 report on smoking and health KJSDHHS 1986a).
Teenage cigarette demand was modeled using price, the
regulation index, and a series of covariates. These analy-
ses showed that restrictive smoking regulations have a
significant effect on teenage cigarette consumption; in
fact, the effect is stronger for teenagers than for adults.
The authors estimated that if the average score on the
regulation index were to increase to the highest level
(smoking restricted in private worksites), teenage ciga-
rette consumption would decline by 41 percent. These
researchers concluded from data on smoking prevalence
that smoking regulations are most effective in prevent-
ing teenagers from starting to smoke, rather than in
reducing their consumption.

Restrictions on Minors' Access to Tobacco

Introduction

  Reducing the availability of tobacco to minors is
important for a number of reasons. Making tobacco

more difficult to obtain makes it less likely that young
persons experimenting with smoking will graduate to
addiction. Adding legal sanctions to the purchase of
tobacco will deter those young persons who are unwill-
ing to break laws to obtain tobacco and will add to the
perceived social unacceptability of tobacco use. Two
croesedonal studies provide prelimmary evidence that
suggests a negative relationship between tobacco access
and tobacco use among young people (Jason et al. 1991;
DiFranza, Carlson, Caisse 1992). Controlling the sale of
tobacco to minors emphasizes the dangerous nature of
tobacco products and places tobacco appropriately in the
category of regulated products. These measures also
reinforce and support the messages about tobacco that
young people receive in school and other settings.

Tobacco Sources for Youth

  When tobacco access laws are not enforced, young
people purchase cigarettes from all available sources.
Nearly all teen smokers have purchased a pack of ciga-
rettes at least once (Gallup Organization 1993). The
majority of minors who smoke purchase their own ciga-
rettes. Small stores and gas stations are the major source
of cigarettes for underage buyers; vending machines are
more popular among the youngest adolescents; and the
majority of adolescents who have never smoked believe
it would be easy for them to buy cigarettes (Forster,
Klepp, Jeffery 1989; Nova Scotia Council on Smoking
and Health 1991; CDC 1992b; Gallup Organizationl993).

  Vending machines provide an easy, if compara-
tively expensive, source of tobacco for young people.
Tobacco industry figures show that in 1988, vending
machines sales accounted for only 4 to 8 percent of all
cigarettes sold, but young people tend to use vending
machines more often than the general smoking public
(National Automatic Merchandising Association 1989).
Vending machines were either often or sometimes used
by 38 percent of ninth-grade daily smokers in the COM-
MIT survey (C ummings et al. 1992). In a Minnesota
survey, 53 percent of 10th~graders who were weekly
smokers reported that vending machines were a major
source of their cigarettes (Forster, Klepp, Jeffery 1989). In
the TAPS, vending machines were either often or some-
times used by 20 percent of 12- through E-year-old
smokers but by only 12 percent of 16 and 17-year-olds
(15 percent overall) (CDC 1992b). Vending machines
were also used more frequently by younger smokers in
a mall-intercept survey (conducted for the vending
machine association) of 1,015 smokers aged 13 through
17 (National Automatic Merchandising Association 1989);
only 2 percent of the 17-year-old smokers us& vending
machines, whereas 22 percent of the 13year-olds did so
(Response Research, Inc. 1989). However, a survey of

154 Prevention


preventing Tobacco Use Among Young People

Canadian children found that those over 15 years old
were more likely than younger children to use vend-
ing machines (Nova Scotia Council on Smoking and
Health 1991).

  Adults can be a source of tobacco for some adoles-
cents. In the COMMTI' survey of ninth-grade smokers, 17
percent indicated that they usually obtained their ciga-
rettes from parents or other adults (Cummings et al. 1992).
InaCanadianstudy,25percentofsmokersaged11 through
15 years had obtained tobacco from parents or guardians
(NovaScotiaCouncilonSmokingandHealth1991). These
figures do not disaim&te between adults' intentionally
supplying minors with tobacco and young persons' steal-
ing cigarettes from adults.

  Tobacco also may be obtained without purchase.
In a survey of elementary and high school students in
Chicago, 14 percent had received free tobacco samples
on at least one occasion (Davis and Jason 1988). In 8
survey of 1,692 Georgia students in grades 7 through
12, about 5 percent of the students reported shop
lifting cigarettes in the preceding 12 months (Cox, Cox,
Moschis 19901.

Studies of Young People's Access to Tobacco

  Siice 1987,13 studies have examined the degree to
which minors could purchase cigarettes from retail es-
tablishments. Right of those studies investigated pur-
chases from vending machines as well as purchases from
over-thecounter outlets; one additional study investi-
gated sales through vending machines only.

  In the 13 over-thecounter studies, illegal sales to
minors ranged from a low of 32 percent in Kansas to a
high of 87 percent in both South Dakota and Oregon; the
approximate weighted-average was 67 percent across all
studies (Table 8). The 13 studies indicated that minors'
ability to purchase cigarettes is a function of the young
people's gender and actual or perceived age, the statu-
tory age of legal sale, and the community's previous
enforcement activities. Although the range of noncom-
pliance to age laws is wide, the majority of minors were
able to buy cigarettes in all studies except those con-
ducted in Kansas (32 percent were able to buy) and
Missouri (46 percent were able to buy). Similar rates of
noncompliance have been observed for smokeless to-
bacco use in one recent study (CDC 1993).

  Of the nine studies that examined vending ma-
chine sales, illegal sales ranged from 82 to 100 percent;
the approximate weighted-average rate of illegal sales
was 88 percent (Table 9). Resides providing baseline
data, six of the 13 over-the-counter studies and five of the
nine vending machine studies also evaluated the effec-
tiveness of various enforcement strategies. The majority
of studies had a significant impact on minors' ability to

purchase cigarettes: the ability to buy deaeased from a
minimal reduction of 14 percent during six months fol-
lowing an educational program, to a maximum reduc-
tion of 93 percent during 18 months following a program
of "stings," licensing, and fines (Table 8). Although an
average rate of reduction (relative change) is difficult to
calculate precisely, various enforcement strategies ap-
pear able to reduce the rate of illegal over-thecounter
salesfrom20to4Opementinlessthanayear.

  Of the five studies that evaluated the effectiveness
of restrictions on the sale of cigarettes through vending
machines, the results are less clear (Table 9). In some
instances, educational programs coupled with licensing
and fines resulted in reductions in sales, while in other
cases these tactics had no effect. In Minnesota, some
success followed the passage of a local ordinance requir-
ing locking devices that must be inactivated by an em-
ployee before a purchase can be made through a vending
machine; results were more significant, however, when
vending machines were entirely banned.

State and Local Laws Regarding Tobacco Distribution
to Minors

  A number of state and local laws legally restrict
minors' access to tobacco, and legislative activity in this
area is increasing (CDC 1991b; Coalition on Smoking OR
Health 1992). All 50 states and the District of Columbia
have adopted a minimum age of 18 for the sale of to-
bacco. Only Virginia does not also restrict the distribu-
tion of samples of tobacco products. Thirty-one states
require vendors to have a license to sell tobacco products;
14 of these will revoke such license as a penalty for
noncompliance, and only eight actually provide for an
enforcer (USDHI-IS 1992b).

  Over the past three years, cigarette sales through
vending machines have been targeted as sources of to-
bacco for young people. Vending machines suggest a
universal availability of cigarettes in our society, and
their presence may discourage merchants from making
efforts to control over-thecounter cigarette sales to mi-
nors. Because vending machines are selfservice, it is
difficult to attach responsibility and liability to a particu-
lar individual for illegal sales to minors from vending
machines, and employees may not feel the same respon-
sibility they might for over-the-counter sales.

  Twenty-one states and Washington, D.C., have
passedlawsrestrictingvendingmachinesales(uSDHHs
1992b). A rapidly growing number of cities have re
sticted this method of sale, and at least 30 cities in
Minnesota, New York, California, Maryland, New Jer-
sey, and Louisiana have totally banned cigarette vending
machines(CoalitiononSmokingORHealth1992I. Much
of this activity has occurred since October 1989, when

Preuention 155


Surgeon General's Report

Table 8.  Published studies examining over-the-counter cigarette sales to minors, United States, 1989-1993
                                                    Relative
               Number of                          reduction in
Study and           stores or       Baseline    Follow-up   succes&l tries
  location         attempts     sales rate (o/o)   sales rate (o/o)   by minors (%I    Time period

Skretny et al. (1990)    62 intervention,       NA          77          -10 *         2 weeks
New York          58 control        NA          86

Jason et al. (1991)        20-30         60-70         36           -40         3 months
Illinois                                        3            -93         18 months

Forster, Hour&an,
McGovern (1992)
Minnesota

301           53           38           -28         3 months

Nelson, Marso, Roby
(1989) South Dakota

30           87          NA           NA           NA

Centers for Disease
Control [CDCI, (1990)
Colorado

97           55         NA          NA          NA

CDC (1993)            89           46          NA          NA           NA
Missouri

*Not statistically significant.
`NA = Not available.

256 Preen tion


preventing Tobacco Use Among Young People

Enforcement method                          Comments

Intervention stores were mailed an info&tional packet
and a supply of warning signs containing that state's
required wording prohibiting tobacco sales to persons
under 18

Minors' ages: 14-16; 40% of intervention stores and
none of control stores posted warning signs, but no
effect on sales rate was observed

Quarterly "stings," license suspension, fines of up to $500

Minors' ages: 12 and 13; all stores in local area visited
before and after passage of local ordinance; proportion
of local junior high school students reporting they were
"regular smokers" decreased from 16% to 5%

None, other than publicity surrounding new state law that
increased penalties for sales to minors

Minors' ages: 12-15; minimum legal age was 18; all
outlets visited multiple times by different minors;
rates averaged

None, baseline study only

Minors' ages: 10-13; no minimum legal age in effect

None, baseline study only

Minors' ages: 9-17; minimum legal age was 18

None, baseline study only

Minors' ages: 13-14; no law in effect, but new law
making 18 the minimum age recently passed

Prevention 157


Surgeon General's ~epott

Study and
location

Number of
machines or
attempts

Baseline     Follow-up
sales rate (o/o)   sales rate (o/o)

Relative
reduction in
purchases by
minors 4%)

Tie period

Jason et al.        3-6          100          50           -50        1 month
(1991)                                0          -100      12 months
Illinois

Fors ter,
Hour&an,
McGovern
(1992)
Minnesota

79          82          80          NS       3 months

DiFranza et al.
(1987)
Massachusetts

6        . 86         NA'       0    NA        NA

Hoppock and
Houston (1990)
Kansas

10          100         NA         NA        NA

`NS = Not significant.
tNA = Not available.

158 Prevention


srmenting Tobacco Use Among Young People

Enforcement methods                   Comments

Letters to merchants, quarterly "stings," license
suspension, fines up to $500

Minors' ages: 12 and 13; all machines in local area
visited before and after passage of local ordinance

None, other than publicity surrounding new state
law that increased penalties for sales to minors

Minors' ages: 12-15; minimum legal age was 18;
all outlets visited multiple times by different minors;
rates averaged

None, baseline study only

Minors' age: 11; minimum legal age was 18

None, baseline study only

Minors' ages: 12 and 15

Prevention 259


Surgeon General's Report

White Bear Lake, Minnesota, became the first city to
abolish cigarette vending machines (Forster, Hour&an,
We&urn 1990). Unfortunately, state legislation condoned
by the tobacco industry in Iowa, Oregon, and Wisconsin
includes a preemption prohibiting local governments
from adopting more restrictive laws, thus ending com-
munity control over vending machine restrictions in these
states.

  The policies th+ cities and states have adopted to
restrict cigarette vending machines, short of a total ban,
include making simple requirements about placing the
machines in view of an employee, restricting the machines
to certain types of businesses or private facilities, requiring
locking devices on the machines, or making policies that
combine these regulations (Forster, Hourigan, Weigum
1990). Little is known about the effectiveness of these
policies. A recent evaluation of a Saint Paul, Minnesota,
ordinance that requires locking devices on all cigaiette
vending machines showed that purchase success was re
duced from 86 percent before the law took effect to 19
percent three months later at locations where the locking
devices were in place (Forster, Hourigan, Kelder 1992).
However, 34 percent of the locations had not installed
locking devices at three months; at one year, 30 percent
still had not done so.

  Laws that prohibit minors from purchasing or pos-
sessing tobacco-instead of laws that only prohibit mer-
chants from selling tobacco to minors-have been adopted
by a few states. The tobacco industry has actively, sup
ported these laws, which have been criticized by some
health professionals as the industry's attempt to deflect
responsibility for illegal sales from the merchants and the
tobacco industry onto the children (DiFranza 1992b; Carol
1992). Laws prohibiting minors' possession of tobacco
should be addressed only after effective regulation and
enforcement at the retail level are in place.

Enforcement of Tobacco-Distribution Laws

  Enforcement is important if laws that intend to re
strict minors' access to tobacco are to be effective. A total
ban on vending machine sales is clearly the easiest to
enforce; more complicated, less restrictive laws require
constant surveillance. In a 1990 study, the USDI-EE, OfTice
of Inspector General, found very few locations in the
United States where state or local laws were being actively
enforced (USDI-PE 1992b). Results from preliminary
cross-sectionalstudiesintwocommunitiesthathaveevalu-
ated compliance to tobacco-distribution laws suggest that
the prevalence of tobacco use is reduced among youth in
those communities (Jason et al. 1991; DiFranza, Carlson,
Cake 1992). However, more tightly controlled studies
with biochemical confirmation of self-reported smoking
~WLLS are needed to confirm this preliminary finding. A

reduction in the availability of tobacco products to minoB
canreasonablybeexpo~y~~e~~~ce~~
random unannounced inspections are conducted fr+
quently. In some jurisdictions, licensing fees are used to
hire health inspectors needed to ensure enforcement
(l3iFran.q 1992b).

  As discussed earlier in this chapter, Section 1926 of
the ADAMHA Reorganization Act (Public Law 102-321),
commonly calIed the Synar amendment, stipulates that
to receive the full complement of block grant funding for
treating and preventing substance abuse, states must
enforce laws prohibiting the sale and distribution of
tobacco products to persons under the age of 18. From
fiscal year 1994 through fiscal year 1996, states must
demonstrate success in reducing the availability of te
bacco products to children under 18. These statutory
provisions will provide significant new leverage for in-
creased enforcement of laws to reduce sales of tobacco
products to youth.

Voluntary Compliance with Age-at-Sale Laws
for Tobacco

  Numerous attempts have been made to encourage
merchants to comply voluntarily (i.e., in the absence of
enforcement) with laws prohibiting sales to minors
(All-man et al. 1989; Skretny et al. 1990; Feighery, Altman,
Shaffer 1991). The most effective of these approaches
was a program that managed to reduce the rate of
successful tobacco purchases by minors from 74 to 39
percent (Altman et al. 1989), although about half of this
improvement had disappeared within a year (Altman
et al. 1991). The program had no effect on illegal sales
from vending machines; 100 percent of these attempts
were successful.

  Recently, representatives of 91 regional and corpo-
rate headquarters of U.S. tobacco companies were inter-
viewed about their beliefs, attitudes, knowledge, and
practices regarding young people's access to tobacco
(Altman et al. 1992). These individuals expressed at least
moderate support for policies limiting teenage access to
tobacco. Respondents' estimates of the frequency of
sales to minors were far below the rates reported in
studies that arranged for youth to try making tobacco
purchases. Spokespersonsfromm~tcompaniesreported
having policies in place to prevent tobacco sales to mi-
nors; however, only about half of these representatives
could state the legal age of tobacco sale in the state in
which they lived.

  At least one corporation, SuperAmerica, has dem-
onstrated that internal programs to reduce cigarette sales
to minors can be effective if accompanied by consistent
surveillance. In response to an increase in the penalty for
the sale of cigarettes to minors in Minnesota and to

160 Prevention


JJreventing Tobacco Use Among Young Peqple

convince ail employees that the company did not want
an illegal sale, SuperAmerica initiated a comprehensive
companywide effort among its 670 stores across the na-
tion to eliminate tobacco sales to minors (Hardman 1992).
The company developed training materials, including a
training video, that address key aspects of tobacco and
alcohol sales. These materials cover product definitions,
legal age for purchase, instructions on when and how to
ask for identification, acceptable forms of identification,
detection of false identification, instructions on when
and how to refuse a sale, and the consequences of mak-
ing an illegal sale. Ail employees-from managers to
sales clerks--view the videotape, take a quiz on the
contents, and sign a statement that they will adhere to
company policies and procedures as a condition of em-
ployment. Printed guidelines, such as a booklet that
shows samples of driver's licenses from all 50 states, are
distributed to employees. In at least one division, area
managers and company auditors have conducted up to
three surveiIlance operations per month. Through ongo-
ing educational efforts, rewards for compliant employ-
ees, and warnings or possible dismissal for repeatedly
noncompliant employees, the company reports achiev-
ing approximately 90 percent compliance in their opera-
tions. Though the program has not been independently
evaluated, it appears to be successful, has drawn signifi-
cant public attention, and is attracting the interest of
other businesses.

  The It's the Law program, introduced by the To-,
bacco Institute in December 1990, is an educational cam-
paign intended to discourage those who are underage
from purchasing tobacco products and to help curb youth
access to cigarettes through aggressive work with the
retail community and by supporting new state laws
(Tobacco Institute 1990a). The program consists of win-
dow decals, buttons, and a packet of educational materi-
als for merchants. In a February 1992 letter to state
governors, the Tobacco Institute stated that "over one
million pieces of program materials have been distrib
uted to thousands of retail outlets across the country'
(Chilcote 1992, p. 2). The materials closely resemble
those distributed by health officials and tobacco-control
professionals in many communities. One version of the
materials displayed a hand holding a lit cigarette with
the text, "It's the law/You must be 18 (19) to buy tobacco
products." This text, however, seems to suggest that it is
illegal for minors to purchase tobacco, whereas in most
states it is only illegal for merchants to sell tobacco to
minors (Choi, Novotny, Thimis 1992). This inaccuracy is
not a minor point; parents misinterpreting these decals
may be reluctant to report a merchant who has sold
tobacco to their child if they mistakenly believe their
child has violated the law (SmokeFree Pennsylvania 1991).

  During the summer of 1991, an experiment was
conducted to determine the efficacy of the It's the Law
program (DiFranza and Brown 1992). Teenagers 13
through 16 years old attempted purchases of tobacco
from 156 retailers in Massachusetts. Only seven of the
retailers were participating in the It's the Law program.
Six of the seven participating retailers (86 percent) proved
willing to illegally sell tobacco to the teenagers; 131 of 149
(88 percent) nonparticipating retailers proved wiIli.ng to
make such sales.

Model Laws to Restrict Distribution of Tobacco to
Minors

  Former Secretary of Health and Human Services
Louis W. Sullixan, M.D., proposed to alI states a Model
Sale of Tobacco Products to Minors Control Act that
contains the following provisions (PI-IS 1990):
o Institute 19 years as the minimum age ,for legal tobacco
sales. One rationale for a minimum age of 19 is that
many high school seniors are 18 years of age. Setting
the minimum age at 19 would help keep tobacco out
of high schools. Further raising the age to 21 would
provide a parallel with alcohol laws and would facili-
tate the enforcement of both laws, since one system
could be set up to enforce both laws.

o Create a tobacco-sales licensing system similar to that
used for alcoholic beverages. Without a licensing
system, health and law enforcement officials have no
control over who sells tobacco. A licensing system
provides enforcement officials with a list of retailers,
thus facilitating educational and enforcement activi-
ties. Applicants for tobacco licenses could be required
to pass a written examination (analogous to those
required for a driver's license) to ensure that these
vendors understand their legal responsibilities.

o Establish a graduated schedule of penalties for illegal sales.
These penalties should include suspension or revoca-
tion of a retailers license to sell tobacco because of
repeated violations of the ageat-sale law.

o Place primary responsibility for enforcement with a desig-
nated state agency; local law enforcement and public
health officials should also participate and have input.
A comprehensive enforcement program can be funded,
without increasing the tax burden, through the sale of
tobacco retail licenses (Davis 1991; DiFranza 1992b).
An additional source of revenue is the state excise tax
on tobacco, especially that portion derived from ille-
gal sales to minors. Several authors have called for an
"illegal profits tax" to be levied on the profit that
tobacco companies realize from the illegal sale of their
products to minors (Slade 1988; DiFranza and Tye

Prevention   161


Surgeon General's Repay

1990; c ummings, Pechacek, Sciandra 1992; Glantz
1993).

Use ctil penalties and local courts toassmfines. Attempts
to enforce access laws through aiminal proceedings
have proved troublesome. Police officials are reluctant
to prosecute because it is time consuming and costly
(USDHHS 199213). Judges are reluctant to burden of-
fenders with a crim+l record for selling tobacco to
minors and are more apt to suspend sentences or issue
wamingswithnofines(Feighery,Altman,SMfer1991~.
Civil enforcement allows violations to be handled
through a ticketing or administrative mechanism and
avoids the need for court hearings (Jason et al. 1991).
Local health departments could provide such enforce-
ment, similar to their role in performing restaurant
inspections (Davis 1991).

Ban cigarette vending machines. As discussed above,
less restrictive measures against vending machine sales
have been shown to be less effective than stronger
measures in preventing tobacco sales to minors.

  Additional features recommended for model laws
include requiring that retailers post highly prominent

signs detailing that the law (for example) requires &t
tobacco be sold from behind the checkout counter, bans
the sale of individual cigarettes and the distribution of
free samples of tobacco products, and bans the distribu,
tion of tobacco through the mail (DiFranza 1992a).

  A recent study Khoi, Novotny, Thimis 1992) ana-
lyzed the adequacy of state laws restricting minors' ac-
cess to tobacco (Table 10). The study found that no state
are meeting all the criteria set by the former Secretary of
Health and Human Services. Only New Hampshire,
Massachusetts, New Jersey, and Utah meet even moder-
ate standards, and the majority of states have only basic
protection against providing tobacco to minors.

  As was discussed earlier in this chapter, as part
of the ADAMHA Reorganization Act Public Law
102-321), the sale and distribution of tobacco products to
anyone under the age of 18 is to be banned in all states by
October 1,1993. A recent report that updates the data of
Choi, Novotny, and Thimis (1992) examines the extent
to which states have adopted and enforced youth access
laws (USDHHS 1992b). All 50 states and the District of
Columbia now ban the sale of tobacco to persons under
the age of 18. Only Florida and Vermont, however, anz

Table 10. Types of laws used by states to restrict minors' access to tobacco

Category

None

Number of states


     4

Regulations

No restrictions on the sale of cigarettes or other tobacco products to
minors

Nominal          5

Basic            38*

Law banning the sale of tobacco to minors below a minimum age
Law banning the sale of tobacco to minors aged < 18 years
Penalties (fines) for the sale or distribution of tobacco products to
minors

Moderate

Comprehensive

4

0

Basic regulations, plus the following:
Signs at points-of-sale warning about the illegality of
the sale of tobacco products to minors; requirement of a
state-issued retail tobacco license
Moderate regulations, plus the following:
Ban on all distribution of tobacco samples and coupons
for free samples; commitment of resources for enforcement
through license fees; no preemption clause prohibiting
local communities from passing more restrictive minors' access
laws; exemption for "sting" operations conducted at the local level

Source: Choi, Novotny, Thimis (1992).
*IncIudes the District of Columbia.

162 Prevention


prmen ting Tobacco Use Among Young People

enforcing their laws through their liquor control agencies
(USDI-IHS 1992b). Low priority by police and the lack of
a designated enforcer were seen as obstacles to enforcing
youth access laws.

risks of smoking (see Table 11). However, the provisions
of the Cigarette Labeling and Advertising Act were gen-
eraIly less stringent than the FTC regulations they re-
placed. For example, the act required that all cigarette
packages contain the following health warning:

Warning Labels on Tobacco Products
Introduction

CAUTION: Cigarette Smoking May be Hazard-
ous to Your Health.

For this report, the term "labeling" refers to the provi-
sion of health-related information on packages and in ad-
wrtising. Package warning labels can include either brief
statements printed directly on tobacco packages or more
detailed information placed on package inserts, similar to
the requirements for pharmaceutical products.

History of Warning Labels on Tobacco Products
Shortly after the Surgeon General released the 1964
report of the Advisory Committee on Smoking and Health
(PHS 1964), the Federal Trade Commission (FTC) pro-
posed three administrative rules that would have re-
quired health warnings on cigarette packages and
advertisements and imposed certain restrictions on ciga-
rette advertising (FTC 1964a). In part, the FTC proposed
that every cigarette advertisement and every pack, box,
carton, and other container in which cigarettes were sold
to the public carry one of the following warnings:
CAUTION-CIGARETTE SMOKING IS A
HEALTH HAZARD The Surgeon General's Ad-
visory Committee on Smoking and Health has
found that cigarette smoking contributes substan-
tially to mortality from certain specific diseases
and to the overall death rate.

This statutory warning was weaker than the earlier
proposed FTC warning in that it did not specifically
mention the risk of death from cancer and other diseases.
Further, whereas the FTC would have required warning
disclosures on product advertisements, the Federal Ciga-
rette Labeling and Advertising Act temporarily (through
June 1969) prohibited any governmental body (includ-
ing federal regulatory agencies, such as the FTC) or
individual state from requiring a health warning in ciga-
rette advertising. The Federal Cigarette Labeling and
Advertising Act also prohibited any health warning on
cigarette packages other than the statement required by
the act itself.

CAUTION: Cigarette smoking is dangerous to
health. It may cause death from cancer and other
diseases.

  In preparing its final ruling, published in June 1964
after a six-month comment period, the FIG found that
cigarette advertisements were false and deceptive be
cause they failed to disclose known health hazards (FTC
1964b). The ruling therefore required alI cigarette adver-
tising and every container in which cigarettes were sold
to consumers to disclose prominently that cigarette smok-
ing is dangerous and may cause death from cancer and
other diseases. However, the final rule left the specific
wording of the warning to the discretion of the tobacco
manufacturers.

The Federal Cigarette Labeling and Advertising Act
of 1965 (Public Law 89-92) preempted the FTC regulation
before its scheduled enactment date. This legislation, the
first federal statute to enact labeling requirements for
tobacco products, marks one of the earliest efforts of the
federal government to warn the public about the health

  On the other hand, the act required the FTC to
transmit an annual report to Congress describing the
effectiveness of cigarette labeling, discussing current ciga-
rette advertising and promotional practices, and making
recommendations for legislation. In its first report to
Congress (FTC 1963, the FTC recommended extending
the health warning to cigarette advertisements and
strengthening the wording:

WARNING: Cigarette Smoking Is Hazardous to
Health and May Cause Death from Cancer and
Other Diseases.

In mid-1969, lust before the expiration of the con-
gressionally imposed temporary restrictions on its ac-
tions, the FTC proposed a rule that would have required
all cigarette advertising "to disclose, clearly and promi-
nently-that cigarette smoking is dangerous to health
and may cause death from cancer, coronary heart dis-
ease, chronic bronchitis, pulmonary emphysema, and
other diseases" (FTC 1969a).

The subsequent Public Health Cigarette Smoking
Act of 1969 (Public Law 91-222) banned cigarette adver-
tising on television and radio after January 1,1971, and
strengthened the package warning label (effective No-
vember 1970) to read as follows:
WARNING: The Surgeon General Has Deter-
mined That Cigarette Smoking Is Hazardous to
Your Health.
Nonetheless, the labeling provisions of this law, like
the Federal Cigarette Labeling and Advertising Act before
it, were substantially less stringent than the FTC regulations
they preempted. Furthermore, the statutory language of
the act continued to omit specific references to the risks and

Prevention   163

161-235 95-7


Surgeon General's Repott

Table 11. Major legislation related to information and education about tobacco and health in the United
     States, 1965-1986                                                                    A

Law

Federal Cigarette Labeling and
Advertising Act (Public Law 89-92)

Date


1965

Labeling requirements

Required a health warning on cigarette
pa&ages

Preempted other warnings on packages

Temporarily preempted Federal Trade
Commission @TC) requirements of any
health warning on cigamtte advertisements

Little Cigar Act
(Public Law 93-109)

1973      None

Comprehensive Smokeless
Tobacco Health Education Act
(Public Law 99-252)

1986

Required the rotation of three health
warnings on smokeless tobacco packages
and advertisements (in circle-and-arrow
format on advertisements)

Preempted any other health warning on
smokeless tobacco packages or adver-
tisements (except billboards)

Source: U.S. Department of Health and Human Services (1989).
*In 1972, an FTC consent order extended the requirement for a health warning on cigarette packages to include cigarette
advertisements.

164 Preoen tion


Prez~enting Tobacco Use Among Young People

Advertising requirements

Congressional
reporting requirements

Other stipulations

Annual report to Congress on health
consequences of smoking (U.S.
Department of Health,
Education, and Welfare [USDHEWI)

None

Annual report to Congress on
cigarette labeling and advertising
(FTC)

Extended broadcast ban on
cigarette advertising to
"little cigars"

None

None



Prohibited smokeless
tobacco advertising on
television and radio

Biennial status report to Congress on
smokeless tobacco use (USDHHS)

Required public information
campaign on health hazards of
using smokeless tobacco'
(USDHHS)

Biennial report to Congress on
smokeless tobacco sales, ad\-ertis-
ing, and marketing practices OTC)

Smokeless tobacco companies
must provide a confidential list of
additives and a specification Of
nicotine content in smokeless
tobacco products+ WSDHHS)

`List of additives does not identify company or cigarette brand, no ;Rlblic disclosure of additives on Packages Or
advertisements required, and no other public disclosure allowed. -
`No funds have been appropriated to carry out this campaign.

Prevention   165


Surgeon General's Repoti

consequences of smoking and extended the preemption on
nqiring any additional health warning for cigarette pack-
ages. The E;Tc was again temporarily restricted Cthrough
June 197l) from issuing regulations that would require a
health warning in cigarette advertising.

  After the second congressional moratorium expired
in late 197l, the FTC announced its intention to file com-
plaints against cigarette companies for f%lure to warn in
their advertising that smoking is dangemus to health. Ne-
gotiations among the companies and the FTC resulted on
March 30,1972, in consent orders nqliring that all ciw
advertising "clearly and conspicuously" display the same
warning req~G1-4 by Congress for cigarette packages (FTC
1981). That consent order specified the type size of the
warning in newspaper, magazine, and other periodical
advertisements of various dimensions; for bi&oard adver-
tisements, the size of the lettering was specified in inches
m 1972).

  In 1975, the US. government f&d a complaint in the
U.S. District Court for the District of Columbia against the
cigarette companies for alleged violation of the consent
order, including failure to display the health warning in
some advertising, failure to display lettering of the specified
size in billboard warnings, and failure to properly place the
warning in some advertisements (FTC 1982). This action
led to judgments in 1981 against the six major cigarette
companies (U.S.A. v. Liggett et a.L 1981; U.S.A. v. RJ.
Reynolds 1981), in which the tobacco manufact~~~~ were
quiredtouselargerletteringinthewarningsdisplayedin
biUboard advertising. In 1981, the FTC also sent a staff
mport to Congress that concluded that the warning appear-
ing on cigarette packages and in advertisements had be
come overexposed and "worn out" and was thus no longer
effective FTC 1981). The report pointed out that the exist-
ing warning was too absimct, generally difficult to remem-
ber, and not personally relevant. Further noting that a
singular warning did not communicate sufficient informa-
tion on the significant, specific risks of sm0ki.n~ the nzport
recommended changing the shape of the warning to a
cinzleand-arrow design (as is currently used in advertise-
ments for smokeless tobacco products [see Figure 5]), in-
easing the size of the warning, and replacing the existing
single warning with a rotational system of warnings.

Current Status of Warning Labels

The 1981 FTC staff report would eventually help
prompt passage of the Comprehensive Smoking Education
Act Public Law 98474), which became effective on
October 12,1984. Effective one year after being signed, this
law required cigarette companies to rotate the following
four wamings on all cigarette packages and in all cigarette
advertisements:

SURGEON GENERAL'S WARNING: Smoking
Causes Lung Cancer, Heart JXsease, Emphy-
sema, and May Complicate Pregnancy.
SURGEON GENERAL'S WARNING: Quitting
Smoking Now Greatly Reduces Serious Risks to
Your Health.

SURGEON GENERAL'S WARNING: Smoking
by Pregnant Women May Result in Fetal Injury,
Premature Birth and Low Birth Weight.

SURGEON GENERAL'S WARNING: Cigarette
Smoke Contains Carbon Monoxide.

Figure 5. Health warnings required for smokeless
    tobacco advertisements (except billboards)

may cause gum

r

\ WARNING:

may cause mouth

alternative to

Sources: U.S. Department of Health and Human Services
(1989); Federal Trade Commission (1981).

166 Pre7mtion


preuenting Tobacco Use Among Young People

  These rotational warnings retained, however, the
rectangular visual format that the FTC staff had recom-
mended abandoning. The congressional warnings were
also substantively more passive in their wording
than those suggested by the FTC. For example, the FTC
had proposed the following two warnings to caution
consumers on the risks of smoking during pregnancy:
Smoking increases the risk of death of your un-
born child.

Smoking increases the risk of spontaneous abor-
tion and stillbirth.

  In 1986, Congress extended requirements for wam-
ing labels to smokeless tobacco products by passing the
Comprehensive Smokeless Tobacco Health Education
Act (Public Law 99-252). This act requires tobacco manu-
facturers to display and regularly rotate the following
three warnings on all smokeless tobacco packages and
on all smokeless tobacco advertising (except billboards):
WARNING: This product may cause mouth can-
  cer.

WARNING: This product may cause gum dis-
ease and tooth loss.

WARNING: This product is not a safe alternative
to cigarettes.

  The act stipulates that the warnings displayed in
advertisements appear in the circle-and-arrow format
(see Figure 5) that the FTC recommended in 1981 for
cigarettes (FTC 1981). The act prohibits federal agencies
as well as state or local jurisdictions from requiring any
other health warnings on smokeless tobacco packages
and advertisements. However, states are not preempted
from enacting additional advertising restrictions.

Limitations of Warning Labels

  An unintended consequence of the federally man-
dated warning disclosure concerns product liability (U.S.
Congress 1989; Gostin, Brandt, Cleary 1991).  Surgeon
General Luther Terry enjoyed widespread support from
the general public and the health community when he
endorsed package warning labels during congressional
testimony. Dr. Terry commented that "the public is
awaiting these steps. Such warnings could materially
increase public awareness of the health hazard by pro-
viding concrete evidence of governmental concern" (U.S.
Congress 1965, p. 33). Yet no one publicly anticipated
that the display of a federally mandated warning would
eventually shield tobacco manufacturers from product
liability. Ironically, the tobacco industry has thus far
been insulated from lawsuits by legislation it has resisted
steadfastly since 1965 (U.S. Congress 1965,1983,1989).

In 1989, Congress considered a bill (H.R. 4543) that ad-
dressed this unintended protection, but the bill has not
been approved.

  Although tobacco manufacturers are legally obli-
gated to disclose health warnings on their product pack-
aging and advertising, and althoughCongress has enacted
legislation that has increased the size, number, and speci-
ficity of the warnings, these legal requirements have not
been as restrictive as the FTC has recommended. More
over, requirements for warning disclosures on promo-
tional items (e.g., T-shirts, caps, key chains, lighters) and
sponsorship logos (such as the Virginia Slims tennis
tournament or the Winston Cup National Association
for Stock Car Auto Racing [NASCAR] races) are notice
ably absent from current legislation. Only the printed
materials (such as catalogues and wrapping accompa-
nying promotional items) are required to carry warning
labels. Thus, despite the statutory ban on broadcast
advertising, widespread corporate sponsorship of tele
vised events enables even very young viewers to see
cigarette brand names displayed with no health warning
(Aitken, Leathar, Squair 1986; Blum 1991). The tobacco
industry spent nearly $100 million on sports and sport-
ing events in 1990, a more than 10 percent increase over
the previous year (FTC 1992). Spending on public enter-
tainment and promotional items has also increased
dramatically. In contrast, spending on magazine adver-
tisements, which do carry warning disclosures, decreased
by more than $52 million (14 percent) from 1989 to 1990.

  Federal law regarding health warnings for tobacco
products continues to preempt state actions, even on
advertisements displayed solely within their jurisdiction
(such as event sponsorship and billboard, mass transit,
and point-of-sale advertising). The tobacco industry fa-
vors the preemption, arguing that to permit local action
would "invite censorship" in violation of the First Amend-
ment and would abandon "Congress' consistent 25-year
policy of nationally uniform regulation" (U.S. Congress
1990, p. 80).

Effectiveness of Warning Labels

Warning labels have a well-established history of
use with products associated with medical risks or
dangerous potential consequences for users. Labeling
information intended to inform consumers of relative
risk and benefit is also provided on many consumer
goods (for example, nutrition labeling on packaged foods
and energy-consumption information on energy appli-
ances). Research on consumer response to such labeling
information has yielded mixed results (Beltramini 1988),
yet two basic factors appear to influence the usefulness
of such labels (LJSDHHS 1987b; Centre for Beh40d

Preuen tion 167


Surgeon Generals Report

Research in Cancer 1992). First, to have an impact on
consumers, warning labels must be designed to take into
account those factors that might influence consumer re-
sponse (e.g., a consumer's previous experience with the
product, previous knowledge of the risks associated with
the product's use, and level of education or literacy).
Second, the labels should be designed in an attention-
demanding format, and the information they bear should
be specific rather than general and written in clear, non-
technical language.

  As was noted before, the Federal Cigarette Label-
ing Act of 1965 (Public Law 89-92) mandated cigarette
warning labels so that "the public may be adequately
informed that cigarette smoking may be hazardous to
health." However, more specific communications objec-
tives were not defined by any of the subsequent legisla-
tion. Information provision is clearly distinct from
information impact (Jacoby, Chestnut, Silberman 1477).
Research indicates that merely placing a warning on a
label or an advertisement is not sufficient for information
processing (Beltramini 1988). One can generally infer
that the goal of warning labels for cigarettes has been to
increase public knowledge about the hazards of smok-
ing, but without more specific goals it is difficult to evalu-
ate whether the labels have had an impact on consumer
decision-making or behavior. Moreover, it is unclear
which "public" Congress intended to be "adequately
illfOlTlld" Is the public that segment of the general
populace who currently smoke, that segment who could
potentially begin to smoke (principally young people), or
that portion of the public (principally ad@) who have
decided to try to quit smoking? Clearly, a warning can
communicate effectively to one segment of the public
without having an impact on the others.

  Without clear objectives or operational definitions,
no ready standards are available to evaluate the effects
of warning labels; and although warning labels have
been required since 1966, little had been reported about
their effectiveness in meeting any objective (USDHHS
1987b). Currently, there are no controlled studies that
permit definitive assessment of the independent impact
of cigarette warning labels on knowledge, beliefs, atti-
tudes, or smoking behavior. The few available empirical
studies deal with the visibility of cigarette warnings in
advertising and consistently indicate that the Surgeon
General's warnings are given little attention or consider-
ation by viewers. Research on package warning labels is
even scarcer.

  In a 1978 Starch Message Report survey, only 2
percent of adults exposed to cigarette ads in 24 different
magazines read the Surgeon General's warning in those
ads (FTC 1981). Similarly, a 1978 study for the Brown and
Williamson Tobacco Company found that only 2 percent
of the respondents read the entire warning in seven ads

for Kool cigarettes; the average time spent "examining"
the warning was less than a second. In an advertising
copy test conducted for the Liggett & Meyers Tobacco
Company in 1976, no respondents read the entire warn-
ing (FTC 1981).

  More recent studies suggest that little attention is
paid to the post-1985 rotational warnings. To examine
adolescent viewing of tobacco advertisements, Fischer et
al. (1989) adapted the market research methodology of
eye-tracking. A computer recorded eye movement as
subjects viewed five different tobacco advertisements
with no time constraints. The average viewing time of
the warnings totaled only 8 percent of the total advertise
ment viewing time. These data further indicate that
more than 40 percent of subj&s did not even view the
warning. An additional 20 percent looked at the warn-
ing but failed to actually read it. Given such strong
evidence of negligible viewing and processing of wam-
ing labels, Fischer et al. (1989) concluded that existing
warnings are unlikely to effectively counter the images
of independence, romance, and fun inherent in tobacco
advertising.

  Evidence from other studies suggests thatimagery
draws attention away from the text of the warnings
(Richards and Zakia 1981; Zemer 1986). The FTC sug-
gested that cigarette companies were explicitly design-
ing advertising to "divert or distract attention away from
the health consequences of smoking" (FNJ 1981, p. 2-2).
Intentionally or not, the sheer volume of cigarette adver-
tising, all of which attempts to incorporate the basic
themes of product satisfaction, positive image associa-
tions, and risk minimization (Popper 19861, may over-
whelm the health-promoting effect of warnings in
advertisements (Schwartz 1986).

  Research indicates that novel warning formats are
more likely to capture viewer attention (Cohen and Srull
1980). The potential communications effectiveness of the
more pointed post-1984 warnings may have been dimin-
ished with the retention of the original rectangular shape
of the pre-1985 warnings (Bhalla and Lastovicka 1984).
Similarly, although the shape of the warnings in
smokeless tobacco advertisements may have been novel
initially, the size and color of these warnings may now
have a reduced effect (Popper and Murray 1989).

  Some studies suggest that warning labels may not
be readable in some advertising media. Davis and
Kendrick (1989) found that under typical driving condi-
tions, the average motorist could read an entire warning
in about one-half of billboard advertisements on streets
and in only 5 percent of billboard advertisements on
highways. Stationary observers could not read the
warnings in any of the transit advertisements studied.
All warnings in the study were in compliance with the
congressionally mandated FTC warning-size templates.

168 Proven tion


Preventing Tobacco Use Among Young People

By contrast, subjects could almost always read the brand
names and identify the advertisement's notable imagery.

  Despite the negligible attention and poor readabil-
ity reported across these studies, there is some evidence
that consumers have moderate awareness of the current
four warning messages. Using a warning recognition
test (rather than a test of the prominence or strength of
the message) to assess basic awareness and attention,
Lieberman Research (unpublished data) found that one-
half of smokers (but fewer than one-half of nonsmokers)
were able to correctly recall one of the rotational warn-
ings. Nearly all recalled the single ~1~1985 warning.
However, Fischer et al. (1989) obtained different results
in their masked recall test with adolescents. After adoles-
cents viewed a series of ads, the researchers covered up
the advertisement headings, all specific references to
cigarette brand names, and the Surgeon General's wam-
ing. Three-fourths of participants could identify the
masked warning as a health message, but only 19 percent
could recall even the general theme of the warning.
These data may suggest that adolescents are generally
aware of the presence of warning labels in tobacco ads
but are far less informed than adults are of the specific
health messages. Similarly low levels of warning recall
among young adults were found for the smokeless to-
bacco warnings (Popper and Murray 1989).

  Research in communication effectiveness (Day
1973) suggests that when viewers actually attend and
read them, warnings do more than merely provide
information. Warnings can also produce potentially
affective and behavioral impacts (Beltramini 1988).
Analyses of the wording and format of mandated health
warnings have suggested reasons for the limited affec-
tive and behavioral impact that can occur even under
optimal conditions of attention and processing. For
example, use of any conditional words such as c12n and
may can dramatically reduce the effect of the entire
warning (Linthwaite 1985). Since two of the current
rotational warnings include the word may (see Table
12), consumers may minimize the inherent health wam-
ings of these messages (Dumas 1992). Furthermore,
although the information presented in the current wam-
ings is more detailed and more absolute than the pre-
1985 single warning, it is also presented in a more
impersonal manner. Readers may be more likely to
believe, learn from, and act on warnings that are per-
sonally relevant than on warnings that are abstract and
technical (Fishbein 1977).

Analysis of the general public's knowledge of the
health risks of smoking could provide some evidence of
the impact of warnings. Although such knowledge has
clearly increased since 1966, when the first health wam-
hg label was required, the effect of the warnings cannot
be isolated from a number of other information sources,

such as reports of the Surgeon General or reported re-
search in the news (FTC 1974; Murphy 1980; USDHHS
1987a). Similarly, it is impossible to determine any inde-
pendent effects of health warnings on aggregate ciga-
rette sales (FTC 1967,1969b) or to isolate the independent
effects of advertising on those aggregate sales. Indeed,
the two effects counter one another and therefore con-
found research. However, a recent and extensive discus-
sion of the issues in the Australian publication Health
Warnings and Contents Labelling on Tobacco Products re-
ports formative data on providing more noticeable and
informative labels to consumers and assembles a com-
pendium of warnings worldwide (Centre for Behavioural
Research in Cancer 1992).

  Perhaps the most powerful indirect indicator of the
effect of cigarette warnings is the number of smokers and
consumers who remain unaware of the health risks of
smoking. After a comprehensive review of studies on
health-risk awareness, including publicly generated stud-
ies and those conducted by the tobacco industry, the FTC
concluded that significant numbem of consumers and still
higher numbers of smokers were unaware of even the
most rudimentary risk information about smoking (FTC
1981). It was this lack of consumer awareness that led the
FTC in 1981 to call for a larger and more attention-
demanding format and for expanded (16 different) rota-
tional warnings for cigarettes.

Effect of Tobacco Taxation

Introduction

  Tobacco is taxed in a variety of ways by federal,
state, and local government. The most important of these
taxes are the federal and state excise taxes on cigarettes
and the general state sales tax applied to tobacco prod-
ucts in most states. Historically, these taxes have been
seen as an effective way to generate revenues, as with
taxes on alcohol. However, in recent years, increased
taxation of tobacco products has been supported as a
public health measure aimed at discouraging smoking
and other tobacco use.

History of Tobacco Taxation

Federal Tobacco Taxes

  During the late eighteenth and early nineteenth
centuries, the federal government experimented with
excise taxes on tobacco products. However, because of
opposition from both producers and consumers, the taxes
imposed in 1794,1812,1816, and during the Civil War
were repealed and finally reduced to one cent per pack.
During the first half of the twentieth century, federal
taxes were, as before the Civil War, increased to help

Prevention 169


Surgeon General's Report

Table 12. Health warnings required on tobacco packages and advertisements in the United States, 1966-1993

Health warnings

Effective dates

Packages   Advertisements

Cigarettes

CAUTION:

Cigarette Smoking May Be Hazardous
to Your Health.

January 1,1966-
October 31,197O

WARNING:

The Surgeon General Has Determined
That Cigarette Smoking Is Dangerous
to Your Health.

November 1,1970-
October 11,1985

March 30,1972-
October 11,1985

SURGEON GENERAL'S WARNING:
Smoking Causes Lung Cancer, Heart
Disease, Emphysema, and May
Complicate Pregnancy.

October 12,1985-present

SURGEON GENERAL'S WARNING:
Quitting Smoking Now Greatly Re-
duces Serious Risks to Your Health.

October 12,1985-present

SURGEON GENERAL'S WARNING:
Smoking by Pregnant Women May
Result in Fetal Injury, Premature Birth
and Low Birth Weight.

October 12,1985-present

SURGEON GENERAL'S WARNING:
Cigarette Smoke Contains Carbon
Monoxide.

October 12,1985-present

Smokeless tobacco

WARNING:               February 27,1987-present

This product may cause mouth cancer.

WARNING:

February 27,1987-present

This product may cause gum disease
and tooth loss.

WARNING:
This product is not a safe alternative to
cigarettes.

February 27,1987-present

X

X

X*



X+

X+





X+

X+

X           X%



X           Xt





X           X$

Source: Federal Trade Commission (1981).
*Required by Federal Trade Commission consent order. All other warnings required by federal legislation.
+The four warnings mandated for cigarette advertisements on outdoor billboards are slightly shorter versions of the same
messages.
The warnings on advertisements must appear in a circle-and-arrow format (see Figure 5). No warnings are required on
outdoor billboards.

170 Prevention


Preventing Tobacco Use Among Young People

finance U.S. military involvement. The last of a series of
increases took place on November 1, 1951, during the
Korean War, when the tax was increased from seven to
eight cents per pack The tax remained at that level for
the next 30 years.

  Over the past decade, however, the federal tax on
cigarettes has been increased significantly. These recent
increases were motivated by a different goal-the need
to raise revenues to deal with the increasing federal
budget deficit. The first of these deficit-motivated in-
creases occurred on March 1, 1983, as part of the Tax
Equity and Fiscal Responsibility Act of 1982, when the
tax was doubled to 16 cents per pack. This increase was
intended as a temporary measure that would be repealed
by October 1,1985. However, after being extended sev-
eral times, the doubling of the tax was made permanent
in 1986.

  As part of the Omnibus Budget Reconciliation Act
of 1985, a tax of 24 cents per pound was levied on snuff, a
tax of 8 cents per pound was imposed on chewing to-
bacco, and a tax of 45 cents per pound was applied to
pipe tobacco. The Omnibus Budget Reconciliation Act of
1990 further increased federal taxes on cigarettes from 16
cents to 20 cents per pack on January 1,199l; a scheduled
additional increase of 4 cents per pack was levied on
January 1,1993. As of 1993, federal taxes on other to-
bacco products are 36 cents per pound for snuff, 12 cents
for chewing tobacco, and 67.5 cents for pipe tobacco.
This represents a tax of less than 3 cents per can of snuff
or pouch of chew; the tax on a pack of cigarettes is
24 cents. Yet even though federal taxes on tobacco
have increased recently, they have become a less impor-
tant source of revenue for the federal government. In
1950, tobacco excise taxes accounted for 3.36 percent of
all federal revenues; by 1989, they accounted for only
0.44 percent of revenues (Congressional Budget Office
KBOI 1990).

State and Local Tobacco Taxes

  In 1921, Iowa became the first state to impose an
excise tax on cigarettes, followed in 1923 by Georgia,
South Carolina, South Dakota, and Utah. By the end of
the 192Os, six additional states had enacted a cigarette
excise tax. By 1940, more than half of all states levied
taxes on cigarettes, and by 1950, only a handful of states
were not imposing an excise tax. In 1969, North Carolina
became the last state to enact an excise tax on cigarettes.
As with the federat government, the imposition of, and
increases in, state cigarette taxes have partly represented
attempts to raise revenue rather than to lower smoking
prevalence. Warner (1981) argues that this financial
motive is especially clear in the history of excise taxes on
cigarettes in the six major tobacco-producing states. The

average date when these states instituted a cigarette ex-
cise tax was 1939-one year earlier than the average for
the remaining states, and many years before the wide-
spread publicity on the health hazards of smoking. Just
before the negative publicity, the average tax rate for
these six states was 2.5 cents per pack, a figure only
slightly less than the other states' average of 2.9 cents per
pack. As is discussed later, the difference has increased
greatly since then.

  Some evidence suggests that state governments
have recently used cigarette excise taxes as a major part
of antismoking campaigns. This conch.rsion can be drawn
from reviewing the number of increases in state excise
tax rates after the mid-1950s release of the first scientific
studies that linked smoking to poor health, and particu-
larly after the 1964 release of the initial Surgeon General's
report on smoking and health (PHS 1964). For instance,
during the latter half of the 1950s more than eight tax
increases occurred per year among the states, whereas
fewer than three per year occurred each year in the early
1950s. Similarly, in the year after the 1964 Surgeon
General's report, there were a record 22 increases in state
excise taxes on cigarettes.

  The established pattern of tax increases continued
during the period when the Fairness Doctrine permitted
antismoking messages on television and radio, and again
after the 1971 ban on television and radio advertising
(Warner 1981). Moreover, as Warner (1981) notes, the
once negligible difference between the tax rates in the
tobaccoproducing states and in the remaining states wid-
ened significantly over this period. This differenoz has
continued to widen since 1981.. By January 1,1992, the
average tax rate in the tobacco-producing states was 7
cents per pack, whereas the average tax rate in the remain-
ing 44 states and Washington, D.C., was 26 cents per pack.

  The active use of cigarette and other tobacco taxes
to discourage tobacco use in some states and the relative
inaction in others results in large differences in taxes and,
consequently, in cigarette prices among states. For
example, the cigarette excise tax ranges from less than
3 cents per pack in Virginia to 60 cents per pack in Hawaii
(see Table 13). When local taxes are added, the
differences become even larger in some locations. The
differences in taxes and prices create incentives for the
casual smuggling (i.e., involving relatively small quanti-
ties, generally for personal use> and organized smug-
gling (i.e., involving large quantities, generally for resale)
of cigarettes from low-tax localities to high-tax localities
and create incentives for other tax-evasion activities.

  The dative ease of transporting cigarettes across lo-
calities has encouraged some people to profit from this
activity (Advisory Commission on Intergovernmental Re-
lations [ACIRI 1977,1985). Although casual smuggling

Prezwrztion   171


Surgeon General's Report

Table 13. State* cigarette taxes, July I,1993

                          Excise tax rate         Sales tax'
  State             (cents per 204garette pack)  (cents per pack)

  Alabama                        16.5                7
Alaska                          29.0                0
  Arizona                         18.0               9
Arkansas                        31.5                9
California                        35.0               15
Colorado                        20.0               0
Connecticut                      47.0                12
Delaware                        24.0               0
District of Columbia                 65.0               13
Florida                         33.9               12
Georgia                         12.0                 6
Hawaii                         60.0               9
Idaho                          18.0                9
Illinois                          30.0               13
Indiana                         15.5                9
Iowa                           36.0                11
Kansas                        24.0               9
Kentucky                        3.0                9
Louisiana                        20.0               8
Maine                         37.0               11
Maryland                       36.0               IO
Massachusetts                     51.0                9
Michigan                        25.0               7
Minnesota                       48.0               14
Mississippi                       18.0               11
Missouri                        13.0                7
Montana                        19.3               0
Nebraska                         34.0                9
Nevada                         35.0               13
New Hampshire                       .  25.0                0
New Jersey                       40.0               12
New Mexico                      21.0                9
New York                       56.0                8
North Carolina                     5.0                6
North Dakota                     44.0               11
Ohio                            24.0                8
Oklahoma                       23.0                8
Oregon                         28.0               0
Pennsylvania                      31.0                11
Rhode Island                      37.0               14
South Carolina                     7.0                8
South Dakota                      23.0                7
Tennessee                        13.0               14
Texas                          41.0               13
Utah                         26.5               9
Vermont                       20.0                9
Virginia                         2.5                7
Washington                      54.0               13
West Virginia                     17.0               10
Wisconsin                       38.0               10
Wyoming                       12.0                0
Sources: Tobacco Institute (1992); Action on Smoking and Health (1993).
*Includes the District of Columbia.
`%es tax information is for November 1,1992.

Total state tax
(cents per pack)

   23.5
   29.0
   27.0
   40.5
   50.0
   20.0
   59.0
   24.0
   78.0
   45.9
   18.0
   69.0
   27.0
   43.0
   24.5
   47.0
   33.0
   12.0
   28.0
   48.0
   46.0
   60.0
   32.0
   62.0
   29.0
   20.0
   19.3
   43.0
   48.0
   25.0
   52.0
   30.0
   64.0
   11.0
   55.0
   32.0
   31.0
   28.0
   42.0
   51.0
   15.0
   30.0
   27.0
   54.0
   35.5
   29.0
    9.5
   67.0
   27.0
   48.0
   12.0

172 Preumtion


Prwenting Tobacco Use Among Young People

had long been a problem, states reported that organized
smuggling increased significantly after the tax increases
of the mid- to late-1960s. Some states were discouraged
from adding further taxes that would motivate increased
smuggling and result in a net loss of revenues gener-
ated by cigarette taxes. In 1978, in response to pressure
from states with high cigarette taxes, the Federal Con-
traband Cigarette Act (Public Law 95-575) was enacted.
This act prohibited the single-transaction transport, re-
ceipt, shipment, possession, distribution, or purchase of
more than 60,000 cigarettes not bearing the tax indicia
of the state in which the cigarettes were initially sold.
The act dealt only with the organized smuggling of
cigarettes, described by the ACIR as the major problem,
and ignored the less problematic casual smuggling
(Kleine 1993). The ACIR (1985) suggests, however, that
the law was even more effective than its proponents
would have predicted.

  California and Massachusetts recently enacted two
large increases in their excise taxes on tobacco. In
November 1988, California voters passed Proposition 99,
which went into effect in January 1989. This law in-
creased California's state excise tax on cigarettes from 10
cents per pack to 35 cents per pack. As was mentioned
earlier, one of the notable features of Proposition 99 is
that 20 percent of the additional revenue raised from the
tax increase is earmarked for the state's antismoking
activities. Legislation similar to Proposition 99 was passed
in Massachusetts in November 1992. This measure, which
took effect on January 1,1993, includes a 25-tent increase
in the state excise tax and a 25 percent increase in the tax
on chewing tobacco.

Besides the specific taxes applied to cigarettes, 45
states and Washington, D.C., have general sales-taxes
that apply to cigarettes. In all but four of these states, the
sales-tax base includes the excise tax. This arrangement
adds an additional 5 to 14 cents per pack to the price of
cigarettes in these states (see Table 13).

  State taxes on other tobacco products have also
become more widespread. By January 1,1992, a total of
37 states had imposed a tax on at least some tobacco
products other than cigarettes; only 14 states were
collecting such taxes in 1964. The same time period
witnessed similar activity at the local level. By fiscal year
1991, 373 cities had imposed additional taxes on ciga-
rettes, and 49 cities were levying taxes on other tobacco
products. In addition, 38 counties were charging their
own cigarette taxes, and 29 counties were assessing addi-
tional taxes on other tobacco products. The largest of
these local cigarette taxes are those imposed in New York
City (8 additional cents per pack) and in Chicago (24
additional cents per pack, including city and county
excise taxes).

Cigarette Tax Increases and Cigarette Prices
  After scientific evidence of the harmful health con-
sequences of cigarette smoking appeared in the mid-
1950s states began to increase cigarette excise taxes not
only to raise revenues but to discourage people from
smoking. Because the combined federal and state taxes
accounted for almost half of the average retail price of
cigarettes, these state tax increases resulted in increases
in the real price of cigarettes (i.e., the price of cigarettes
relative to the price of ail goods and services, as mea-
sured by the National Consumer Price Index) (Table 14).
The relative price of cigarettes also rose as a result of the
state tax increases. This trend was accelerated after the
1964 release of the first Surgeon General's report on
smoking and health. The resultwas that between 1955
and 1971, the nominal price of cigarettes had risen by
over 70 percent (almost half of this increase was attrib-
uted to the state tax increases), and the real price of
cigarettes had risen by over 13 percent.
  These increases in real cigarette prices were short-
lived. The rapid inflation of the 197Os, coupled with the
relative stability of state excise taxes on cigarettes, led to
a sharp drop in real cigarette prices between 1971 and
1981. Federal taxes remained fixed at 8 cents per pack
during this period. As was discus& earlier, the emer-
gence of organized smuggling in response to the grow-
ing differences in state and local taxes discouraged states
from continuing to increase cigarette taxes. Combined
federal and state taxes, as a percentage of retail cigarette
prices, fell from 47 percent at the beginning of this period
to 33 percent in 1981. The absolute cost of producing
cigarettes fell throughout this period, largely because of
a decrease in the average quantity of tobacco per ciga-
rette as the market share for `low tai" cigarettes in-
creased (Harris 1987X The overall result was that between
1971 and 1981, the real price of cigarettes declined by
almost 28 percent.

Beginning in 1982, this downward trend in real
cigarette prices was reversed as state taxes rose in antici-
pation of the doubling of the federal excise tax on ciga-
rettes that was scheduled for January 1, 1983. These
combined taxincreasesled to the largest singlc+year jump
in prices (from 1982 to 1983). However, Harris (1987)
argues that the main cause of the increase in the real price
of cigarettes from 1981 through 1986 was not the increase
in either the federal tax or state taxes, but rather the
increases in the wholesale prices of cigarettes because of
markups by manufacturers. He contends that most of
these markups were not justified by increases in the cost
of production. Instead, he suggests that markups were
the result of a coordinated price increase by the six firms
that dominate the tobacco industry. More recent data
lend support to Harris's argument: although state and

Prezwntion 173


Surgeon General's Report

Table 14. Cigarette taxes and cigarette prices per pack, 1955-1991

Year

Average
state tax
(cents)

                 Taxes as                    Real+
      Average   percent-    Real'      Real'      average
Average   cigarette   age of     average    average   cigarette
federal    price      average    state tax*   federal    price
tax (cents)   (cents)    price'     (cents)     tax (cents)   (cents)

1955       3.5       8.0       22.7      48.7       13.1       29.9      84.7
1956       3.8       8.0       23.2       47.4       14.0       29.9      85.3
1957       3.9       8.0       23.8      48.8       13.9       28.5      84.7
1958        4.0       8.0       25.0      48.0       13.8       27.7      86.5
1959        4.2       8.0       25.6      46.6       14.4       27.5      88.0
1960       4.7       8.0       26.1      48.9       15.9       27.0      88.2
1961        4.7       8.0       26.1       43.6       15.7       26.8      87.3
1962        5.1        8.0        26.9       48.3       16.9       26.5      89.1
1963       5.2       8.0       26.8      49.4       17.0       26.1      87.6
1964       5.6       8.0       27.9      49.3       18.1       25.8      90.0
1965        5.9        8.0       28.2      49.8       18.7       25.4      89.5
1966        6.9        8.0       30.0      51.4       21.3       24.7      92.6
1967       7.1       8.0       30.5      50.8       21.3       24.0      91.3
1968       8.4       8.0       32.3      49.2       24.1       23.0      92.8
1969       9.1       8.0       32.8      48.9       24.8       21.8       89.4
1970       10.2        8.0       37.1       47.7       26.3       20.6      95.6
1971       10.7       8.0       38.9       46.8       26.4       19.8      96.0
1972       11.6       8.0       40.0      47.7      27.8       19.1      95.7
1973       12.1        8.0       40.3      48.4       27.3       18.0      90.8
1974       12.1       8.0       41.8      47.6       24.5       16.2      84.8
1975       12.2       8.0       44.5      44.5       22.7       14.9      82.7
1976       12.4        8.0       47.9       41.4       21.8       14.1      84.2
1977       12.5       8.0      49.2      40.5       20.6       13.2      81.2
1978       12.9       8.0       54.3      37.1       19.8       12.3      83.3
1979       12.9       8.0       56.8      35.5       17.8       11.0      78.2
1980       13.1       8.0       60.0      34.5       15.9        9.7      72.8
1981       13.2       8.0       63.0      33.1       14.5        8.8      69.3
1982       13.5       8.0       69.7      29.9       14.0        8.3      72.2
1983       14.7       12.0       81.9      26.8       14.8       12.0      82.2
1984       15.3       16.0       94.7      33.2       14.7       15.4      91.1
1985       15.9       16.0       97.8      32.3       14.8       14.9      90.9
1986       16.2       16.0      104.5      30.8       14.8       14.6      95.3
1987       16.9       16.0       110.0       29.9       14.9       14.1      96.8
1988       18.2       16.0       122.2       28.1       15.4       13.5      103.3
1989       21.8       16.0       127.5       26.5       17.6       12.9      102.8
1990       24.7       16.0       144.1       26.4       18.9        12.2      110.3
1991       25.9       20.0       153.3       25.6       19.0       11.7      112.6

Source: Tobacco Institute (1992).

rercentages cannot be calculated directly from the tax and price information, since taxes are weighted average taxes for the
entire fiscal year, whereas prices and percentages are generally as of November 1.
`Real taxes and prices are obtained by dividing the actual taxes and prices by the National Consumer Price Index, with the
average of 1982-l 984 being the benchmark. AII data are for the fiscal year ending June 20.
State taxes are a weighted average of the tax in taxing states, including Washington, D.C. (42 in 1955,51 in 1970 and after).
Price refers to the median retail price in aII taxing states.

174 Prewn tion


Preventing Tobacco Use Among Young People

federal taxes have increased since the late 1980% the
percentageoftheretailpriceofcigarettesaccountedforby
these taxes actually fell from 33 percent in 1981 to 26
percent in 1991 (Tobacco Institute 1992). The combined
effect of increases in federal and state taxes and in
manufacturers price resulted in the real price of ciga-
rettes increasing by over 60 percent between 1981 and
1991. This upward trend in real cigarette prices is ex-
pected to continue at least through 1993, as the federal tax
increases to 24 cents per pack as part of the 1990 deficit-
reductionagreement. Therefore,althoughtaxesaccounted
for a smaller percentage of the increased retail price of
cigarettes from 1981 to 1991, the increased taxes, along
with manufacturers' price increases, were still passed on
to consumers, and the real price of cigarettes increased.

Effect of Excise Taxes on Tobacco Use

  One of the fundamental principles of economics,
illustrated by a downward-sloping demand curve, states
that as the real price of any commodity rises, consump-
tion of that commodity falls. Some researchers have
speculated that the consumption of an addictive prod-
uct, such as cigarettes, might be an exception to this rule.
However, numerous econometric studies, including
several recent studies that explicitly model the addic-
tive aspects of cigarette smoking, confirm that this
fundamental economic principle does indeed apply
to cigarettes. Thus, since increases in cigarette excise
taxes generally result in increased cigarette prices,
these tax increases may be effective in reducing cigarette
consumption.

  Economists use the concept of price `elasticity of
demand to describe the sensitivity of consumption to
changes in price. The price elasticity of demand is de
fined as the percentage change in consumption that
results from a 1 percent increase in price. For example,
a price elasticity of -0.5 implies that a 10 percent increase
in price would reduce consumption by five percent.
A brief review of recent U.S. studies of cigarette de
mand follows.

Aggregate Data Studies

  One set of recent studies of cigarette demand used
aggregate data. Price elasticity estimates obtained from
these studies ranged from -0.14 to -1.23; the majority of
these estimates fell within the narrower range from -0.20
to -0.50. All but two of the estimates were obtained from
econometric studies that besides examining the effect of
price, used income, demographic variables, and other
policy-related variables to explain differences in ciga-
rette consumption. Failing to include such potentially
important determinants of demand could lead to biased
estimates of the effects of price and other policies on

cigarette smoking. Several of these studies made theo-
retical and empirical attempts to model the addictive
aspects of cigarette consumption. In contrast with
the econometric analyses, Peterson et al. (1992) used
an epidemiologic approach similar to the quasi-
experimental approach of Baltagi and Goel(1987). Both
studies obtained estimates of the price elasticity of de-
mand that were consistent with those obtained from
econometric studies.

  Differences in the estimates obtained from these
studies partly resulted from differences in theoretical and
empirical modeling methods. For example, the studies
that used a pooled time series of state cross-sections
might provide estimates of the price elasticity that exceed
the true value of the elasticity if cigarette smuggling is
ignored, since studies based on aggregate data use state
cigarette sales figures as their measure of consumption.
That is, states with relatively low cigarette taxes and
prices may sell a substantial number of cigarettes to
residents of nearby states where prices are higher. Thus,
the sales figures from the states with lower cigarette taxes
and prices will overstate cigarette consumption within
those states, whereas those with higher taxes and prices
will understate consumption. Many of the most recent
studies, however, including those by Baltagi and Levin
(19861, Becker, Grossman, and Murphy (19921, and
Chaloupka and Saffer (1992), have controlled for this
problem. Siily, if the addictive aspects of COIISUIYIP
tion are ignored, the estimated price elasticity may be
biased. Again, many of these recent studies, including
Baltagi and Levin (19861, Becker, Grossman, and Murphy
(19921, and Keeler et al. (1992) estimated demand equa-
tions that explicitly model the addictive aspects of con-
sumption. In addition, at the aggregate level, cigarette
prices and quantity are simultaneously determined by
the interaction of cigarette supply and demand. Ignoring
this simultaneity would lead to biased estimates of the
effects of cigarette prices on demand. Bishop and Yoo
(1985) and Porter (1986) explicitly modeled this relation-
ship and estimated price elasticities of demand that fell
within the -0.20 to -0.50 range generally found in other
studies based on aggregate data. Finally, two of these
studies, Keeler et al. (1992) and Flewelling et al. (1992),
considered the effects of the relatively large change in the
California cigarette excise tax. Their estimated price
elasticities suggest that the impact of price on demand is
independent of the level of price.

  Even with the differences in data, theoretical mod-
eling, and estimation techniques, one general conclusion
can be drawn from these aggregate studies-increases in
cigarette prices will reduce cigarette consumption. At
least part of this reduction is likely due to adolescents'
quitting smoking, reducing the amount they smoke, or
not taking up smoking in the first place &JSDIII-IS 1991).

Prevention   175