A new study conducted by two Cornell University economists suggests that higher cigarette taxes increase the likelihood that smokers will enroll in SNAP benefits, or food stamps.
While admitting that cigarette taxes can have an effect in reducing overall cigarette consumption, the taxes can also have unintended effects. One such effect, according to their research, is that individuals from lower-income households are more likely to apply for food stamps if cigarette taxes are increased.
“We also find that low-income smoking households are 50% more likely to enroll in food stamps relative to their non-smoking counterparts,” said Kyle Rozema and Nicolas R. Ziebarth, the study’s authors. “Exploiting variation in state cigarette taxes across the US states over one decade, we then show that cigarette tax increases are significantly associated with higher food stamp enrollment.”
The economists’ research shows a significant uptick in food stamp enrollment among smoking households just prior to the implementation of a new cigarette tax, while enrollment among non-smoking households remains relatively stable.
The study also points out several other unintended consequences of high cigarette taxes, such as stockpiling cigarettes, smuggling cigarettes from low tax areas, and finding more efficient ways to smoke.
“Overall, the findings suggest that the recent expanded use of cigarette taxes to curb smoking has likely contributed to the recent increase in food stamp enrollment,” write Rozema and Ziebarth. “Moreover, insomuch that the option to enroll in public assistance programs can decrease the effectiveness of cigarette taxes in nudging people to reduce smoking, our findings may also help explain the recent stagnation in cigarette consumption despite unprecedented rises in cigarette taxes.”
The authors of the study warned that revenue from a cigarette tax increase could be partially offset by increased spending on food stamps.