The Single Cigarette Economy in India--a Back of the Envelope Survey to Estimate its Magnitude.

Abstract

Sale of single cigarettes is an important factor for early experimentation, initiation and persistence of tobacco use and a vital factor in the smoking epidemic in India as it is globally. Single cigarettes also promote the sale of illicit cigarettes and neutralises the effect of pack warnings and effective taxation, making tobacco more accessible and affordable to minors. This is the first study to our knowledge which estimates the size of the single stick market in India. In February 2014, a 10 jurisdiction survey was conducted across India to estimate the sale of cigarettes in packs and sticks, by brands and price over a full business day. We estimate that nearly 75% of all cigarettes are sold as single sticks annually, which translates to nearly half a billion US dollars or 30 percent of the India's excise revenues from all cigarettes. This is the price which the consumers pay but is not captured through tax and therefore pervades into an informal economy. Tracking the retail price of single cigarettes is an efficient way to determine the willingness to pay by cigarette smokers and is a possible method to determine the tax rates in the absence of any other rationale.