The Quest for Effective Tobacco Control Strategies: Revisiting Price and Taxation Policy

Abstract

The prevailing wisdom in scholarly and policy-making institutions dealing with public health is that skillful use of price and taxation policy will reduce the prevalence of tobacco consumption because of the inverse relationship between tobacco price and consumption. Empirical evidence of this axiomatic inverse relationship has been sparse. This paper analyzes the effects of increased taxation on consumption of tobacco products in 162 countries during 2005-2020. Results indicate that there is weak negative relationship between change in adult smoking prevalence and change in taxation suggesting that higher tax rates on tobacco products tend to lower adult smoking prevalence, but in a modest rather than robust sort of way. The small negative association indicates that perhaps it will take very large tax increases to meaningfully affect adult smoking.