Rising Cigarette Prices and Rising Obesity: Coincidence or Unintended Coincidence?

Economists have begun to debate if the rise in cigarette prices in the U.S. in recent decades has contributed to the nation’s rise in obesity, reaching conclusions that are surprisingly sensitive to specification. I show that allowing for the effect to occur gradually over several years leads to the conclusion that a rise in cigarette prices is actually associated with a long-run reduction in body mass index and obesity. This result is robust to the different methodologies used in the literature. I also provide evidence that indirect effects on exercise and food consumption may explain the counterintuitive result.