In November 1996, residents of Oregon approved a $0.30 increase in the cigarette tax (to $0.68 per pack). The measure stipulated that 10% of the additional tax revenue be allocated to the Oregon Health Division to develop and implement a tobacco-use prevention program. In 1997, the health division created the Oregon Tobacco Prevention and Education Program (TPEP), a comprehensive, community-based program modeled on the successful tobacco-use prevention programs in California and Massachusetts.
To assess both the effects of the tax increase and the TPEP in Oregon, the Oregon Health Division evaluated data on the number of packs of cigarettes taxed before (1993-1996) and after (1997-1998) the ballot initiative and implementation of the program. The results were also compared with national data. This article summarizes the results of that analysis, which indicate that consumption of cigarettes in Oregon declined substantially after implementation of the excise tax and TPEP and even exceeded the national rate of decline.
Source of Data
The Oregon Health Division obtained data on the sale of cigarette tax stamps from the Oregon Department of Revenue for 1993 through 1998. The agency also obtained data on the proportion of revenue received at the old and new rates after the tax change (February 1997) to calculate the number of packs sold each month. Per capita cigarette consumption was calculated by dividing the number of packs sold by the total population of Oregon each year.
National comparison estimates were generated using data from the Tobacco Institute on state tax receipts for wholesale cigarette deliveries. Reliable figures were available through December 1997. Data from Oregon and the other three states (Arizona, California, and Massachusetts) with tobacco-use prevention programs funded through state initiatives were excluded from the comparison estimates. National per capita consumption was calculated by dividing the total number of packs sold by the total population in the remaining 46 states and the District of Columbia. Calculations for Oregon for 1996 to 1998 represent the 1 year before and the 2 years after the tax increase.
From 1993 to 1996, taxable per capita consumption of cigarettes increased 2.2% in Oregon and decreased 0.6% in the 46 remaining states and the District of Columbia. From 1996 to 1998, taxable per capita cigarette consumption declined 11.3% in Oregon (from 92 packs to 82 packs; Figure 1). Despite a 2.7% increase in the state’s population, 25 million fewer cigarette packs were sold in 1998 than in 1996. In the United States, during 1996 to 1997, per capita consumption declined 1.0% (from 93 to 92 packs).
Editorial Note From the CDC
Two years after the implementation of a ballot measure to increase the excise tax on tobacco and initiate TPEP, per capita consumption declined 11.3% in Oregon, or the equivalent of 200 cigarettes (10 packs) per capita. Elements of the program include community-based tobacco-use prevention coalitions in every county; a statewide public awareness and education campaign; comprehensive school-based programs; tribal tobacco-use prevention programs; multicultural outreach and education; a quitters’ help line providing smoking cessation support; and projects evaluating new approaches to prevent or reduce tobacco use. The Tobacco Prevention and Education Program has an annual budget of $8.5 million, 93% of which is awarded in grants or contracts to external partners (eg, county health departments, community-based agencies, tribal governments, and private-sector partners implementing the public awareness campaign).
Decreased consumption is probably a result of both the tobacco-use prevention program and the increase in the price of cigarettes. Price elasticity of demand, defined as the percentage change in demand for cigarettes resulting from a 1% change in price, is an estimated -0.4%. A 15.8% increase in the price of cigarettes (the amount of the price increase in Oregon, calculated in 1996 dollars) should result in a 6.3% decrease in cigarette consumption. The findings in this report are consistent with reports from other states with tobacco-use prevention programs and indicate that excise taxes in conjunction with prevention programs reduce cigarette consumption more than excise taxes alone.
Other Factors Potentially Responsible for Downward Trend
Other factors that could account for the decrease in cigarette consumption in Oregon probably did not contribute to the decline. Smuggling or cross-border sales probably are insignificant because a large proportion of Oregon’s population resides in Portland, near Washington, where cigarette prices are higher. Increased sales on Indian reservations in the state probably would not contribute to the decline because cigarettes sold on reservations are taxed, and tribes are reimbursed only for tobacco taxes paid by tribal members. Another possibility is that the observed downward trend for Oregon may reflect national declines. Although reliable national data are not available for 1998, it is unlikely that the decrease in Oregon reflects secular trends.
During 1990-1997, the annual rate of decline in cigarette consumption for all 50 states averaged only 1.4%.
Oregon’s decrease in cigarette consumption also appears to be resulting in decreases in cigarette smoking prevalence. Preliminary data from the Behavioral Risk Factor Surveillance System for 1996-1998 indicate that the prevalence of smoking among adults in Oregon declined 6.4%, representing 35,000 fewer smokers. The decline in cigarette consumption in Oregon, California, and Massachusetts indicates that an adequately funded, comprehensive tobacco-control program can quickly and substantially reduce tobacco use.
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