The Economic Impact of State Cigarette Taxes and Smoke-free Air Policies on Convenience Stores

This study investigates the economic impact of state cigarette taxes and smoke-free air policies on convenience stores. Specifically, we examine whether increasing cigarette taxes and/or enacting stronger smoke-free air policies will reduce number of convenience stores per capita in a state. Our analyses show that the number of convenience stores is positively correlated with state cigarette taxes. One explanation for this comes from studies that find cigarette taxes are over-shifted, leading to larger increases in consumer prices than the tax increase, which could potentially increase profits at the retail level. In addition, we found smoke-free air policies do not have negative impacts on convenience stores. Our results are robust across different model specifications and exclusion/inclusion of other tobacco control policies. Additionally, our results are robust with regard to a broad definition of convenience stores which includes gas stations.