Journal of Health Economics
Teen drinkers are over twice as likely as abstainers to smoke cigarettes. This empirical study provides evidence of a robust complementarity between these health behaviors by exploiting the ‘‘cross-price’’ effects. The results indicate that the movement away from minimum legal drinking ages of 18 reduced teen smoking participation by 3 to 5%. The corresponding instrumental variable estimates suggest that teen drinking roughly doubles the mean probability of smoking participation. Similarly, higher cigarette taxes and reductions in teen smoking are associated with a lower prevalence of teen drinking. However, the results which rely on cigarette taxes for identification are estimated imprecisely.