Smoking: behavioural economics and public policy

Implications and applications of UK smoking data

This research has two components. Firstly, researchers have reviewed the relevant behavioural economics literature with a focus on the policy implications of different theories and explored cases where behavioural economics provides a case for traditional forms of intervention, such as taxes and regulation, and not just nudges.  

The second part of the project is a quantitative study of the relationship between tobacco taxes and smokers' happiness in the UK. This is based on the idea of 'time inconsistency' from behavioural economics. There is evidence from North America that higher taxes improve smoker happiness, which may be because smokers value taxes as a commitment device helping them to quit. This project will provide the first UK evidence using panel data and extend the analysis to consider the effect of the smoking ban.

Findings from the first phase of the study

Findings from the IFS examination of the behavioural insights for tax and benefit policy summarised in an Observation from the IFS, and accompanying Commentary.

Project details

 

Researcher:

Andrew Leicester, Institute for Fiscal Studies

Funding Programme

Open Door

Amount and duration:

£86,250

May 2011 - December 2012