Price, Income, and Affordability as the Determinants of Tobacco Consumption: A Practitioner's Guide to Tobacco Taxation.

Nicotine & Tobacco Research : Official Journal of the Society for Research on Nicotine and Tobacco
Nigar NargisJeffrey Drope

Abstract

Tobacco product prices and consumers' income are the two major economic determinants of tobacco demand. The affordability of tobacco products is dependent on the price of tobacco products relative to consumer income. Increase in tobacco tax is expected to lead to higher price, lower affordability, and reduced consumption. Price elasticity and affordability elasticity are used in analyzing the effect of tobacco tax increases on tobacco consumption and public health. The availability of both parameters raises the question of which one to apply in policy discussions. Using global data on cigarette consumption, price, income, and tobacco control measures for 169 countries over 2007-2016, this study estimated the price elasticity and affordability elasticity of cigarette consumption by country income classification using country-specific fixed effects model for panel data. The estimates show that the restriction of equal strength of the effects of price and income changes on tobacco consumption maintained in affordability elasticity estimation is valid for low- and middle-income countries, while it is rejected for high-income countries. Affordability elasticity may prove to be a useful parameter to explain and predict the sensitivit...Continue Reading

References

Feb 1, 1973·British Journal of Preventive & Social Medicine·M A Russell
Feb 25, 2003·Lancet·Derek Yach
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Dec 1, 2010·Tobacco Control·Frank J ChaloupkaUNKNOWN Working Group, International Agency for Research on Cancer
Aug 9, 2011·Current Problems in Pediatric and Adolescent Health Care·Bethany HippleJonathan Winickoff
Jan 8, 2013·Nicotine & Tobacco Research : Official Journal of the Society for Research on Nicotine and Tobacco·Rebekah H Nagler, Kasisomayajula Viswanath
May 16, 2017·Preventive Medicine·Anh NgoCe Shang
Apr 17, 2019·International Journal of Environmental Research and Public Health·Nigar NargisXiao Hu
Apr 18, 2019·Bulletin of the World Health Organization·Nigar NargisGeoffrey T Fong
Dec 7, 2019·International Journal of Environmental Research and Public Health·Xiao HuRong Zheng

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Citations

Jul 6, 2021·Health & Place·Juan R Vallarta-RobledoIdris Guessous
Aug 11, 2021·Tobacco Control·Zaineb Danish SheikhAnna B Gilmore

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