The 13th World Conference on Tobacco OR Health

Objective: In July 2003, Wyoming increased its cigarette excise tax with the intention of both deterring use and increasing revenue. Research on the cigarette consumption and tax revenue since the tax increase went into effect indicates that both can be achieved successfully. These findings are similar to those of studies conducted nationally (New York, California, Utah) and internationally, (e.g., South Africa or Zimbabwe). Wyoming's study differs, however, in its unique approach for analyzing the market demand using supply cost methodology.

Methods: To analyze sales and revenue data (1999-2005) collected by the Wyoming Department of Revenue, the Wyoming Survey and Analysis Center (WYSAC) used the Becker type addiction demand model to calculate the market (demand) for cigarettes. The analysis also sought to identify other possible reasons (besides the increase in cigarette excise tax) influencing the reduced level of cigarette consumption in Wyoming since the excise tax went into effect.

Results: Although a unique approach was used, analysis of the data reveals a typical pattern: when excise taxes increase, sales initially drop sharply, then slowly rebound, although they never fully recover. As of DATE, post-tax consumption has been reduced by 11.9 %. Further, as of DATE, average post-tax revenue has increased by 293.01% compared to the pre-tax average for cigarette excise tax collections. As in other studies using different methodologies, Wyoming's post-tax sales trend stayed slightly below the pre-tax trend.