# Cigarette purchasing behaviors and financial burden of cigarette spending after a major tobacco tax increase in California: A descriptive analysis of household panel data

## TL;DR

After a $2-per-pack cigarette tax increase in California, fewer households bought cigarettes, but low-income households saw a bigger financial burden from smoking.

## Contribution

This study provides new evidence on how a major tobacco tax affected cigarette purchasing and financial burden, particularly among low-income households.

## Key findings

- Cigarette purchasing by California households dropped from 10.6% in 2016 to 4.2% in 2022.
- Low-income households showed smaller declines in cigarette purchasing compared to middle- and high-income groups.
- Annual cigarette spending among low-income households increased significantly from $651 in 2016 to $1343 in 2022.

## Abstract

To examine the longitudinal patterns in cigarette purchasing behaviors and financial burden of cigarette spending among California households following the implementation of Proposition 56, which increased cigarette excise taxes by $2-per-pack in April 2017.

Using longitudinal NielsenIQ Consumer Panel data, we identified a cohort of 2324 California households that participated continuously from 2016 through 2022. We compared outcomes — cigarette purchasing behaviors and financial burden of cigarette spending — from the 2016 baseline to each follow-up year and the 5-year average during 2018–2022 (post-implementation), both overall and by income group.

In 2016, 10.6 % of California households purchased cigarettes; this percentage declined steadily to 4.2 % in 2022 (p < 0.01). The reduction over five years was significantly smaller among low-income households compared to middle-income (2.1 % vs. 5.1 %, p < 0.01) and high-income groups (2.1 % vs. 3.8 %, p < 0.01). Among low-income households that continued purchasing cigarettes, annual cigarette spending increased from $651 at baseline to $1053 in 2021 (p = 0.04) and $1343 in 2022 (p < 0.01).

The percentage of California households purchasing cigarettes declined across all income groups over five years after Proposition 56, with the smallest declines among low-income households. In this group, annual cigarette spending increased significantly in the fourth and fifth post-implementation years.