Tobacco use is the leading cause of preventable death and disability in the U.S (Centers for Disease Control and Prevention [CDC], 2008; Mokdad et al., 2004) and much effort has gone into identifying population-level interventions to reduce the use and abuse of tobacco. In particular, cigarette taxation has been recognized as one of the most significant policy instruments to reduce smoking (World Health Organization, 2008) and extensive resources have been allocated to understanding the direct effect of taxes on reducing cigarette use. A large body of evidence indicates that increases in cigarette taxes lead to reductions in cigarette consumption, with the resulting outcomes of decreased initiation, increased quit behavior, and reductions in premature death (Chaloupka et al., 2012; Chaloupka and Warner, 2000; Glantz and Gonzalez, 2012; Levy et al., 2000; Sung et al., 2005; Wilson and Thomson, 2005). Studies estimate that a 10% increase in cigarette taxes equates to a 3–5% decrease in cigarette consumption in adults (Chaloupka et al., 2012; Evans and Farrelly, 1998), and even stronger effects are seen among adolescents and low SES populations (CDC, 1998; Ding, 2005).
