The interesting graphic above details cigarette sales state by state between 1970 and 2012. While there’s no question smoking has declined in the US over the past 40-plus years, the trend has nuances not indicated in the chart.
If one looks at the map for 2012, the last year shown, cigarette sales are greatest in West Virginia, Kentucky and New Hampshire, with the three states registering 105, 100 and 94 packs sold per resident, respectively.
New Hampshire would seem out of place with Kentucky and West Virginia, two states located firmly in the Appalachians, where smoking is more accepted culturally in a region noted for its blue-collar lifestyle.
On the other hand, a significant portion of New Hampshire now serves as a bedroom community for Massachusetts’ white collar labor force, with the commensurate rise in housing bringing an increasing number of young middle- and upper-middle class individuals into the state, hardly the sort known for consuming large amounts of smokes.
However, it almost certainly wasn’t nicotine-frenzied Granite State residents alone that drove New Hampshire cigarette sales in 2012, but individuals from all of New England.
In 2012, a pack of cigarettes cost $4.86 in New Hampshire, compared to $6.97 in neighboring Maine, $7.60 in Vermont and $8.49 in Massachusetts. Prices were almost as high or even higher in the other two New England states: $8.16 a pack in Rhode Island and $8.85 in Connecticut.
Cigarette sales per capita, 2012. Click on to understand.
Factor in that New Hampshire has no sales tax and you had a happy hunting ground for those wanting to stock up on cheap cigarettes. And the difference in price made a short drive worthwhile: someone from Massachusetts, for example, who drove over the border to New Hampshire could save nearly $75 on just two cartons (20 packs) of cigarettes.
West Virginia’s average price for cigarettes in 2012 was $4.84 a pack, the lowest in the country. Prices in all neighboring states were higher: Virginia, $5.43; Ohio, $5.67; Maryland, $6.53; Kentucky, $6.56; and Pennsylvania, $6.93. It’s easy to see that residents in border states would likely at least partly drive up sales in a bid to save money.
Kentucky, however, is an outlier. Its price per pack wasn’t cheap – it ranked in the top half of the nation in terms of cost per pack in 2012 – so why did it come in second in per capita cigarette sales?
Looking at the cost of cigarettes in surrounding states, Tennessee, $4.91 a pack; Virginia, $5.43; Indiana, $5.56; Missouri, $5.87; and Illinois, $10.25, all but the latter are cheaper than Kentucky.
However, Kentucky had just seen prices spike due to increases in state and federal cigarette taxes, raising the cost per pack from $4.97 to $6.56.
While some Kentuckians may have been able to cross the border to buy less-expensive smokes in bordering states, it was likely inconvenient for others to do so, due to distance and terrain. And, of course, some people are going to smoke, no matter what the expense. Over time, Kentucky’s per capita rate will drop, but not into the range of, say California or Utah.
And it doesn’t matter how high the government raises cigarette taxes; at some point, smokers will simply begin buying tax-free bootleg smokes.
So while smoking is certainly on the decline in the US, trying to gauge the impact of tax increases on smoking on a state-by-state basis is an iffy proposition. Pushing up the price of cigarettes in one state may simply be driving at least a portion of consumers to surrounding states, particularly if prices are significantly lower.
(HT: Carpe Diem)