A number of mechanisms may contribute to the inverse association between cigarette taxes and alcohol consumption. Cigarette taxation is an effective means of reducing smoking and the beneficial spillover influence of cigarette taxation on alcohol consumption among smokers may be mediated by reductions in smoking. In addition, smokers often give higher priority to smoking cigarettes than using alcohol and illicit drugs (Kozlowski et al., 1989), and another reason considered is that smokers who continue to smoke following cigarette tax increases have less disposable income to spend on alcohol and thus may reduce their consumption. Further, changes in alcohol-related state policies that are systematically correlated with increases in state excise cigarette taxes may have also impacted changes in drinking behaviors. While we adjusted for changes in alcohol price between waves, and included state as a fixed effect in our analyses to account for potential confounding by unmeasured state-level variables that may be correlated with smoking and drinking, future research that includes simultaneous changes in smoking and additional state policies is needed to tease apart the potential mechanisms underlying the association between increases in cigarette taxes and reductions in drinking behaviors.
