How does the affordable care act Medicaid expansion affect cigarette consumption?—The mechanism and heterogeneity

Abstract

AbstractWe examine the average effect of the affordable care act (ACA) Medicaid expansion on cigarette consumption as well as heterogeneous effects by consumer types, depending on whether they use anti‐smoking products and their baseline level of cigarette consumption. Using the Nielsen homescan consumer panel and generalized difference‐in‐differences (GDD) method, we find that anti‐smoking products can induce cigarette smoking among moderate and heavy smokers. However, the ACA Medicaid expansion reduces cigarette smoking through channels other than anti‐smoking products. As a net result, the ACA Medicaid expansion leads to a reduction in smoking. Light smokers are the main beneficiaries of ACA Medicaid expansion—their average cigarette consumption reduces by over one pack per month.