A cross-country study of cigarette prices and affordability: evidence from the Global Adult Tobacco Survey

Abstract

To describe the characteristics of two primary determinants of cigarette consumption: cigarette affordability and the range of prices paid for cigarettes (and bidis, where applicable) in a set of 15 countries. From this cross-country comparison, identify places where opportunities may exist for reducing consumption through tax adjustments. Self-response data from 45,838 smokers from 15 countries, obtained from the Global Adult Tobacco Survey (GATS) 2008-2011. Using self-response data on individual cigarette expenditure and consumption, we construct a measure of the average cigarette price smokers pay for manufactured cigarettes (and bidis, where applicable) in 15 countries. We use these prices to evaluate cigarette affordability and the range of prices available in each country. These survey-derived measures of cigarette price and affordability are uniquely suited for cross-country comparison because they represent each country's distinctive mix of individual consumption characteristics such as brand choice, intensity of consumption, and purchasing behavior. In this sample of countries, cigarettes are most affordable in Russia, which has the most room for tobacco tax increase. Affordability is also relatively high in Brazil and China for cigarettes, and in India and Bangladesh for bidis. Although the affordability of cigarettes in India is relatively low, the range of cigarette prices paid is relatively high, providing additional evidence to support the call for simplifying the existing tax structure and reducing the width of price options. China has both high affordability and wide price ranges, suggesting multiple opportunities for reducing consumption through tax adjustments.