Real Price Of Cigarettes Research Articles

The impact of cigarette prices on smoking participation and tobacco expenditure in Vietnam.

Vietnam is one of countries with the highest number of smokers in the world and the high smoking prevalence among men in the region. Although the real cigarette prices increased by around 4% during the 2010–2015 period, the prevalence of daily cigarette smoking among men decreased slightly from 31.3% to 30.7% during this period. This raises the question of whether cigarette consumption is sensitive to price. In this study, we estimated the effect of cigarette prices on smoking participation and tobacco expenditure in Vietnam. We found that a one-percent increase in the real cigarette price reduced the probability of cigarette smoking among males by 0.08 percentage points (95% CI from -0.06 to -0.10), equivalent to the price elasticity of the smoking prevalence at -0.26 (95% CI from -0.16% to -0.33%). Using this estimate, we predict that if the cigarette price is increased by 10%, the daily cigarette smoking prevalence among men would decrease from 30.7% to 29.9% and the number of male smokers would decline by around 270 thousand. Higher cigarette prices also reduced per capita tobacco expenditure of households. A one-percent increase in the cigarette price decreased per capita expenditure on tobacco consumption expenditure of households by 0.43 percent (the 95% CI from -0.029 to 0.822). This finding suggests that raising tobacco taxes and prices can be an effective measure to reduce tobacco use.

Estimation of Price Elasticity of Demand for Cigarettes in Bosnia and Herzegovina – Macro Data Analysis

Tobacco consumption continues to be behavior engaged in by a large percentage of Bosnia & Herzegovina (BiH) citizens. According to the official statistics, nearly half of the state’s adults, that is about 1,200,600 people, consume tobacco products on a daily bases. The state excise policy is one of the main available tools for reducing smoking prevalence because cigarette prices are under the direct impact of this policy. The specific excise on cigarettes introduced in BiH in 2009 and has increased every year so it was the main driver of cigarette price growth. In order to provide research-based evidence for more effective tobacco taxation policies in BIH, in this paper we estimate the price elasticity of demand for cigarettes using the macro-level data for the period 2008 to 2017, on a semi-annual basis. The results have shown that the increase in prices of cigarettes has a statistically significant impact on cigarette consumption, at a significance level of 1%. The estimated price elasticity coefficient is in the range from -0.71 to -0.83, depends on the selected control variables used in the model. It means that the increase in real cigarette prices for 10% led to a decrease in cigarette consumption in the range from 7.1% to 8.3%.

Exploiting a low tax system: non-tax-induced cigarette price increases in Taiwan 2011–2016

IntroductionThis study aims to analyse the non-tax-induced price increasing strategies adopted by tobacco industry in Taiwan, a high-income country with comprehensive tobacco control policies but low tobacco taxes and a...

Observed retail price of Australia’s market-leading cigarette brand before and up to 3 years after the implementation of plain packaging

ObjectiveDespite claims by tobacco companies that plain packaging would lead to lower cigarette prices, recommended and observed real cigarette prices in Australia rose in the 9–11 months after plain packaging...

How Raising Tobacco Prices Affects the Decision to Start and Quit Smoking: Evidence from Argentina.

We used a two-part model for the estimation of the price elasticity of participation and consumption of cigarettes by the duration of the smoking habit and a continuous-time split-population model for the estimation of prevalence and duration of smoking onset and smoking addiction, allowing for covariates in the participation component of the model. Results: We computed the total price elasticity of consumption of cigarettes by quartiles of addiction and found that for the people located in the lowest quartile of addiction the total price elasticity is around −0.51; while for those located in the highest quartile of addiction this figure is only −0.19. Then, a 10% increase in cigarette prices, via taxes, reduces the consumption of those in the early stages of the addiction by 5% and for those with a longer history of addiction by only 1.9%. Estimating the continuous-time split-population model we found that, at the mean starting age of 15 years, an increase of 10% in real cigarette prices is expected to delay smoking onset by almost two and a half years. On the other hand, the same policy is less effective to reduce the duration of the habit because there is no meaningful relationship between the duration of the smoking habit and the real price of cigarettes.The policy of raising cigarette excise taxes, to increment prices, seems to be more effective to delay smoking onset. On the other hand, the same policy is less effective to reduce the duration of the habit. A policy recommendation that emerges from this evidence is that for people with a developed addiction a combination of increasing taxes and other public health policies, like cessation therapies, could prove more effective.

Effects of Prices on Youth Cigarette Smoking and Tobacco Use Initiation in Ghana and Nigeria.

Background: Population growth in the African region is set to outpace the rate of decline in smoking prevalence, leading to a projected increase in the total number of smokers. As most tobacco users initiate during their adolescent years, tobacco prevention strategies targeting youth will be particularly important. Methods: This study estimated the impact of cigarette prices on youth cigarette smoking and tobacco use initiation in Ghana and Nigeria using the Global Youth Tobacco Survey data. First, we used cross-section data and logit models to estimate the effects of prices on youth cigarette smoking. Second, we created pseudo longitudinal data and used continuous-time hazard models to evaluate the impact of cigarette prices on tobacco use initiation. Results: We found that higher cigarette prices decreased both 30-day cigarette smoking and tobacco use onset significantly in both Ghana and Nigeria. Additionally, the price elasticity of cigarette smoking and tobacco use initiation ranged from −0.44 to −1.13, and −1.04 to −3.66, respectively. Conclusions: As one of the first studies on youth tobacco consumption in Sub-Saharan Africa, this study strongly suggests that policies that increase real cigarette prices can lower both cigarette smoking and tobacco use initiation among youth in Ghana and Nigeria.

The association between cigarette affordability and consumption: An update.

ObjectivesThis study calculates cigarette affordability for 78 countries worldwide from 2001 to 2014 using the Relative Income Price (RIP) ratio defined as the percentage of per capita GDP required to purchase 100 packs of cigarettes using the lowest price from Economist Intelligence Unit (EIU) database, examine the association between cigarette affordability and cigarette consumption, and calculate the affordability elasticity of demand.Design and methodsRIP (2001–2014) was calculated for 16 low-income economies, 19 lower middle-income economies, 13 upper middle-income economies, and 30 high-income economies. Ordinary least square regressions were used to analyze the association between cigarette affordability and consumption.ResultsPer capita consumption continued to rise in low-income countries and decreased slightly in lower middle-income countries as the RIP of cigarette consistently declined in low- and lower middle-income economies from 2001 to 2014. The real cigarette prices continued to decline in low- and lower middle-income countries and continued to rise in upper middle- and high-income countries. Though cigarettes were more expensive in HICs than were in LMICs, cigarettes were more affordable in HICs than were in LMICs. The regression results show a 10% increase in the RIP of cigarettes led to a 2% decrease in per capita consumption. The affordability elasticity of demand differed significantly between HICs and LMICs. However, the effect of cigarette affordability on consumption has not changed over time.ConclusionsTo control the smoking epidemic, low- and lower middle-income countries should further increase cigarette prices. The rate of price increase should exceed the rate of economic growth and outpace the inflation rate to make cigarettes less affordable and thereby reducing tobacco use.

Analysis of cigarette demand in Argentina: the impact of price changes on consumption and government revenues.

To estimate cigarette demand and to simulate a tax policy targeted to reduce tobacco consumption. Demand was estimated using a vector error correction model. Simulation exercises present the impact of a tax increase on consumption and revenues. Changes in real income and the real price of cigarettes affect the demand for cigarettes in Argentina. The long term price elasticity is 0.279 (a 10% increase in real prices reduces cigarette consumption by 2.79% per quarter) and the long term income elasticity is 0.411 (a 10% increase in real income raises consumption by 4.11% per quarter). Even in a conservative scenario, simulations show that increasing the price of cigarettes by 100% using excise taxes would maximize revenues and reduce cigarette consumption. There is sufficient room to increase taxes, reducing cigarette consumption, while still increasing tax revenues.

Determinants of regular smoking onset in South Africa using duration analysis

ObjectivesSouth Africa has achieved significant success with its tobacco control policy. Between 1994 and 2012, the real price of cigarettes increased by 229%, while regular smoking prevalence decreased from about...

Are lower income smokers more price sensitive?: the evidence from Korean cigarette tax increases

BackgroundThe cigarette excise taxes and the price of a typical pack of cigarettes in Korea have not increased since 2005, and effective tax rate as a fraction of price and...

Smoking outside: the effect of the Irish workplace smoking ban on smoking prevalence among the employed

In March 2004, Ireland became the first country to introduce a nationwide workplace smoking ban. The primary aim of the ban was to reduce people's exposure to second-hand smoke. A 95% compliance rate among employers suggests this aim was achieved. By prohibiting smoking in the majority of indoor working places, an effect of the ban was to increase the non-monetary cost of smoking. The aim of this paper is to examine whether the extra non-monetary cost of smoking was concentrated on the employed. A difference-in-differences approach is used to measure changes in smoking behaviour among the employed relative to the non-working population following the introduction of the workplace smoking ban. The research finds that the workplace smoking ban did not induce a greater reduction in smoking prevalence among the employed population compared with the non-working population. In fact, the evidence suggests a significantly larger decrease in smoking prevalence among the non-workers relative to the employed. Changes in the real price of cigarettes and changes in attitudes to risk are discussed as possible causes for the pattern observed.

Differential Impact of Tobacco Control Policies on Youth Sub-Populations

Background: While previous studies have demonstrated the efficacy of tobacco control interventions in reducing tobacco use among youth overall, there have been very few studies that examine the potential differential impact of tobacco control policies on various youth subgroups, defined by socio-economic status (SES), race/ethnicity, and gender. Objective: We examined the relationship between state-level cigarette prices and smoke-free air laws and youth smoking prevalence and intensity for various youth sub-populations in the United States. Methods: We estimated a 2-part model of cigarette demand using data from the 1991 through 2010 nationally representative surveys of 8th-, 10th-, and 12th-grade students as part of the Monitoring the Future project. Findings: We found that real cigarette prices are strong determinants of youth smoking. Blacks, females, Hispanics, and low-SES subpopulations are found to have a larger price response with respect to smoking prevalence than the full sample. Smoke-free air laws are found to have a negative effect on smoking prevalence for the full sample and for the male, white, and high-SES sub-populations. Conclusions: This research concludes that higher cigarette prices will reduce smoking prevalence rates of Blacks, Hispanics, females, and low-SES subpopulations faster than the overall youth population and other youth sub-populations. Moreover, this research concludes that smoke-free air laws will reduce smoking prevalence for the overall youth population with the largest reductions in high SES and male subpopulations.

Impact of Tobacco Control Policies and Mass Media Campaigns on Monthly Adult Smoking Prevalence

We sought to assess the impact of several tobacco control policies and televised antismoking advertising on adult smoking prevalence. We used a population survey in which smoking prevalence was measured each month from 1995 through 2006. Time-series analysis assessed the effect on smoking prevalence of televised antismoking advertising (with gross audience rating points [GRPs] per month), cigarette costliness, monthly sales of nicotine replacement therapy (NRT) and bupropion, and smoke-free restaurant laws. Increases in cigarette costliness and exposure to tobacco control media campaigns significantly reduced smoking prevalence. We found a 0.3-percentage-point reduction in smoking prevalence by either exposing the population to televised antismoking ads an average of almost 4 times per month (390 GRPs) or by increasing the costliness of a pack of cigarettes by 0.03% of gross average weekly earnings. Monthly sales of NRT and bupropion, exposure to NRT advertising, and smoke-free restaurant laws had no detectable impact on smoking prevalence. Increases in the real price of cigarettes and tobacco control mass media campaigns broadcast at sufficient exposure levels and at regular intervals are critical for reducing population smoking prevalence.

Changes in smoking prevalence in Ukraine in 2001–5

To analyse trends in smoking prevalence in Ukraine from three surveys conducted in 2001-5, and to explore correlates of observed changes, in order to estimate the stage of tobacco epidemic in Ukraine. Repeated national interview surveys in Ukraine in 2001, 2002 and 2005. Prevalence of current smoking among the population aged > or = 15 years. The age-standardised prevalence of current smoking in Ukrainian men was 54.8% in 2001 and 66.8% in 2005. Among Ukrainian women, prevalence increased from 11.5% in 2001 to 20.0% in 2005. ORs for yearly increase in prevalence were estimated as 1.164 (95% CI 1.111 to 1.220) for men and 1.187 (1.124 to 1.253) for women, which implies that, on average, 3-4% of men and 1.5-2% of women living in Ukraine join the smoking population each year. In Ukraine, smoking prevalence is increasing in most population groups. Among men, the medium deprivation group with secondary education has the highest smoking prevalence. Among women, while the most educated, young and those living in larger cities are the leading group for tobacco use, other groups are also increasing their tobacco use. Tobacco promotion efforts appear to have been significantly more effective in Ukraine than smoking control efforts. The decrease in real cigarette prices in Ukraine in 2001-5 could be the main factor explaining the recent growth in smoking prevalence.

Price and cigarette consumption in Europe

Objective: To analyse the variation in demand for tobacco according to price of cigarettes across the European region. Design: Cross-sectional study. Setting: All the 52 countries of the European region....

Le contrôle du tabac en Afrique du Sud

The aim of this paper is to briefly describe South Africa's experience in tobacco control, and to highlight some of the lessons that are applicable to other developing countries. South Africa's tobacco control strategy is based on two main pillars: (1) rapidly increasing excise taxes on tobacco, and (2) comprehensive legislation, of which the most important features are banning all tobacco advertising and sponsorship, and prohibition of smoking in public and work places. As a result of the increases in the excise tax, the real (inflation-adjusted) price of cigarettes has increased by 115% between 1993 and 2003. Aggregate cigarette consumption has decreased by about a third and per capita consumption has decreased by about 40% since 1993. Despite the decrease in cigarette consumption, real government revenue from tobacco excise taxes has increased by nearly 150% between 1993 and 2003. Some important lessons can be drawn from South Africa's experience in tobacco control. Firstly, strong and consistent lobbying was required to persuade the government to implement an effective tobacco control strategy. Country-specific research, drawn from a variety of disciplines, was used to back up and give credibility to the lobbyists' appeals. Secondly, rapid increases in the excise tax on cigarettes are particularly effective in reducing tobacco consumption. An increase in the excise tax increases the price of cigarettes, which in turn reduces cigarette consumption. In South Africa a 10% increase in the real price of cigarettes decreases cigarette consumption by between 6 and 8%. Similar results have been found for many other developing countries. Thirdly, while an increase in the excise tax is generally regarded as the most effective tobacco control measure, tobacco control legislation also plays an important role in a comprehensive tobacco control strategy. Bans on tobacco advertising and bans on smoking in public and work places denormalise and deglamorise smoking, and are likely to make other tobacco control interventions more effective. Fourthly, the industry would typically claim that they want to be constructive partners in drafting "reasonable and sensible" tobacco control legislation. In South Africa's experience, when they were involved in the drafting process in 1993, the role of the industry was to delay and water down the legislation. In drafting an amendment to the original legislation in 1998, the industry's views were largely ignored, and the result was a more comprehensive and effective piece of legislation. Fifthly, tobacco control legislation, particularly laws banning smoking in indoor public places, is largely self-enforcing. It does not require heavy-handed police intervention, as is typically claimed by the industry. The legislation clarifies and explains that the rights of non-smokers to clean air supersede the right of smokers to smoke. Smokers typically refrain from smoking where smoking is not allowed.

Tobacco industry price-subsidizing promotions may overcome the downward pressure of higher prices on initiation of regular smoking

Real cigarette prices in the US increased from the early 1980s to early 1990s. Holding all else equal, adolescent initiation of regular smoking should have declined during this period. Using national population-based surveys (n = 336 343) conducted in the 1990s, we present trends (early 1960s to mid-1990s) in the initiation of regular smoking among 14-17-year-old adolescents and 18-21-year-old young adults. We also present trends in consumer-price-index-adjusted cigarette price and tobacco-industry expenditures for price-subsidizing promotions. We relate price and price-subsidizing tobacco industry expenditures to trends in initiation in the two age groups, using autoregressive integrated moving average models (ARIMA). From the model results, we conclude that price-subsidizing promotions may provide the tobacco industry with an effective way to segment the market. That is, they effectively offer lower prices to population subgroups that are more price-sensitive (e.g. young smokers not yet addicted), countering the depressing effect of general price increases on smoking. Thus, we find that the relationship of cigarette price to smoking behavior is more complex than previously described.

Price and consumption of tobacco in Spain over the period 1965-2000.

Changes in cigarette price have had an appreciable impact on smoking prevalence in several countries. We analysed the price elasticity of demand for cigarettes (effect of price of cigarettes on tobacco consumption) between 1965 and 2000 in Spain. For total consumption of cigarettes, a 1% increase in price is associated with a 0.19% decrease of consumption (price elasticity of -0.19; P<0.01). The real price of blond cigarettes was significantly and inversely associated with blond cigarette consumption: on average, smoking prevalence decreased 1.25% for a 1% increase in the real price of cigarettes (significant price elasticity of -1.25). For black cigarettes we found a lower but still high and significant elasticity of -0.61. There is an inverse relation between price and consumption of cigarettes in Spain, indicating that interventions at the economic level (such as real increases in prices) may have an important public health impact in tobacco control.

The Effect of Public Policies and Prices on Youth Smoking

1. IntroductionGovernment regulation of the market for tobacco products can be justified in a number of ways. Smoking is associated with market failures such as negative externalities and imperfect information among market participants, and these failures provide one rationale for government intervention. Another is the huge health care costs associated with the health consequences of smoking. The cost of medical treatment for smokers and second-hand smokers inflates health insurance premiums for everyone, regardless of smoking participation; in addition, many of these expenses are paid from public funds.Youth is of particular interest for public policy makers and economists who study smoking behavior. The evidence from recent economic studies indicates that adolescents are significantly more responsive than adults to changes in cigarette prices (U.S. Department of Health and Human Services [USDHHS] 1994). In addition, the vast majority of smokers complete their initiation prior to their 21st birthday (Gilpin et al. 1994). Therefore, focusing preventive efforts on youth seems to be the most effective way to achieve a long-term reduction in smoking prevalence. Public policy makers are also concerned with youth-specific smoking externalities. Almost all first use of cigarettes occurs during the high school years (Kessler 1995). At that age, consumers typically underestimate the health consequences of smoking and the risk of nicotine addiction (Kessler 1995; Johnston, O'Malley, and Bachman 2001), thus underestimating the price of smoking to them.The annual prevalence of cigarette smoking in the United States has been declining since the 1970s, stabilizing in the 1990s with approximately 62 million smokers in 1996, which represented 23.2% of the U.S. population (USDHHS 1996). Even though this figure is not high relative to smoking in other countries (the world average smoking prevalence in 1997 was 29%; World Health Organization, 1997), the declining trend in cigarette consumption has substantially slowed in the 1990s.It is particularly troubling that the slight decrease in smoking prevalence among adults in the 1990s was accompanied by an increase in smoking participation among youth and young adults. The evidence of this trend was detected in several nationally representative surveys. For example, the 1997 Youth Risk Behavior Survey (YRBS) reported an increase in average smoking prevalence among high school students from 27.5% in 1991 to 36.4% in 1997. According to the Centers for Disease Control and Prevention, the number of 12th grade high school students who started smoking as a daily habit jumped from 708,000 in 1988 to 1,200,000 in 1996, an increase of 73% (CDC 1995, 1996, 1997, 1998).However, statistics at the end of the 1990s suggest a respite from this trend in increased youth smoking prevalence. The YRBS reported a decline in smoking participation for 9th graders between 1997 and 1999 (by 17%), but very little change for 10th and 11th graders (decline by 2%), and a slight increase in smoking prevalence among 12th graders (by 8%). In 2000, the Monitoring the Future Surveys (MTFS) reported a decrease in smoking participation among all three surveyed high school ages (Johnston, O'Malley, and Bachman 2001).There is an economic explanation for this trend in smoking prevalence among youth. Even though the federal cigarette excise tax was raised twice in the beginning of the 1990s, real prices of cigarettes fell in the subsequent period. Between 1993 and 1996, the real price of a pack of cigarettes, adjusted for inflation, dropped by 10% (Tobacco Institute 1997). Real cigarette prices began to rise again toward the end of the 1990s. Between 1997 and 1999, the real price of a pack of cigarettes adjusted for inflation increased by 48% (Orzechowski and Walker 2000). This sudden change was partly triggered by a new financial liability of tobacco companies toward 46 states under the Master Settlement Agreement (November 1998) amounting to a $206 billion financial burden for the industry over the following 25 years. …

Global and regional estimates of the effectiveness and cost-effectiveness of price increases and other tobacco control policies.

The objective of this study was to provide conservative estimates of the global and regional effectiveness and cost-effectiveness of tobacco control policies. Using a static model of the cohort of smokers alive in 1995, we estimated the number of smoking-attributable deaths that could be averted by: (1) price increases, (2) nicotine replacement therapy (NRT), and (3) a package of non-price interventions other than NRT. We calculated the cost-effectiveness of these policy interventions by weighing the approximate public-sector costs against the years of healthy life saved, measured in disability-adjusted life years, or DALYs. Even with deliberately conservative assumptions, tax increases that would raise the real price of cigarettes by 10% worldwide would prevent between 5 and 16 million tobacco-related deaths, and could cost 3-70 US dollars per DALY saved in low-income and middle-income regions. NRT and a package of non-price interventions other than NRT are also cost-effective in low-income and middle-income regions, at 280-870 US dollars per DALY and 36-710 US dollars per DALY, respectively. In high-income countries, price increases were found to have a cost-effectiveness of 83-2771 US dollars per DALY, NRT 750-7206 US dollars per DALY and other non-price interventions 696-13,924 US dollars per DALY. Tobacco control policies, particularly tax increases on cigarettes, are cost-effective relative to other health interventions. Our estimates are subject to considerable variation in actual settings; thus, local cost-effectiveness studies are required to guide local policy.