Substance abuse and the demand for cigarettes

Substance abuse population consists of a special segment of the addiction group who overindulges in the use of drugs and alcohol. Concurrent use of cigarettes and drug or cigarettes and alcohol is especially high among this population. This study examines the impact of lifetime substance abuse diagnosis on cigarette smoking. Using two waves of individual records from the National Comorbidity Survey (NCS), the paper examines their smoking behavioral pattern from two perceptive: whether they respond differently to cigarette price changes from non-abusers and whether they are likely to substitute for drug or alcohol use upon quitting smoking. Results indicate that substance abusers and non-abusers may differ in how they respond to price and cost. Differential price elasticity estimates show that substance abusers do respond negatively to cigarette price changes, and in this study has a higher price elasticity than the non-abuse group (-0.55 versus -0.26). By adding quitting in the regression analysis, I obtain a significant and negative effect of quitting on drug and alcohol use for the substance abusers. As a result quitting is not likely to have a causal effect on possible substitution for the old 'habit' substance use for this vulnerable group. Higher cigarette excise taxes can still be an effective public policy tool for reducing smoking among individuals who have abused other substances and are also more likely to be heavy smokers. Concerns for the side effects of such policy such as substitution for other substance use upon quitting are alleviated.