The impact of smoke-free legislation on the illegal cigarette trade in China: A longitudinal study

Although numerous studies have examined the relationship between smoke-free legislation and cigarette consumption, research focusing specifically on its impact on the illicit cigarette trade remains scarce. This study explores the effects of subnational smoke-free legislation on the illicit cigarette trade in China.

Using a balanced panel dataset of nearly 300 Chinese cities from 2011 to 2016, we first extract information on illicit tobacco seizures from the administrative records of the State Tobacco Monopoly Administration (STMA). We then employ a fixed-effects model to analyze the impact of smoke-free legislation on local illicit cigarette trade. To address endogeneity, we conduct robustness tests using propensity score matching and instrumental variables methods.

We find that smoke-free legislation has a significant negative impact on the illicit cigarette trade. Specifically, regression results indicate that the legislation reduces local illicit trade by an average of 26.65% (β= -0.2665; 95% CI: -0.50- -0.02; p=0.026). Heterogeneity analysis reveals that this effect is more pronounced in coastal and border regions compared to inland areas.

These findings suggest that non-price tobacco control measures can effectively suppress the illicit market through a supply-side deterrence mechanism. However, further longitudinal studies are required across diverse institutional contexts to obtain sufficient evidence to inform global anti-smuggling strategies.