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A comparison of alternative methods for measuring cigarette prices
  1. Frank J Chaloupka1,
  2. John A Tauras2,
  3. Julia H Strasser3,
  4. Gordon Willis3,
  5. James T Gibson4,
  6. Anne M Hartman3
  1. 1Department of Economics, Institute for Health Research and Policy, University of Illinois at Chicago, Chicago, Illinois, USA
  2. 2Department of Economics, University of Illinois at Chicago, Chicago, Illinois, USA
  3. 3Division of Cancer Control and Population Sciences, National Cancer Institute, Rockville, Maryland, USA
  4. 4Information Management Services, Inc., Calverton, Maryland, USA
  1. Correspondence to Frank J Chaloupka, Institute for Health Research and Policy, University of Illinois at Chicago, 1747 W. Roosevelt, Room 558, Chicago, IL 60608, USA; Anne M Hartman, National Cancer Institute, 9609 Medical Center Drive, Room 3E-416, Rockville, MD 20850, USA; hartmana{at}mail.nih.gov

Abstract

Background Government agencies, public health organisations and tobacco control researchers rely on accurate estimates of cigarette prices for a variety of purposes. Since the 1950s, the Tax Burden on Tobacco (TBOT) has served as the most widely used source of this price data despite its limitations.

Purpose This paper compares the prices and collection methods of the TBOT retail-based data and the 2003 and 2006/2007 waves of the population-based Tobacco Use Supplement to the Current Population Survey (TUS-CPS).

Methods From the TUS-CPS, we constructed multiple state-level measures of cigarette prices, including weighted average prices per pack (based on average prices for single-pack purchases and average prices for carton purchases) and compared these with the weighted average price data reported in the TBOT. We also constructed several measures of tax avoidance from the TUS-CPS self-reported data.

Results For the 2003 wave, the average TUS-CPS price was 71 cents per pack less than the average TBOT price; for the 2006/2007 wave, the difference was 47 cents. TUS-CPS and TBOT prices were also significantly different at the state level. However, these differences varied widely by state due to tax avoidance opportunities, such as cross-border purchasing.

Conclusions The TUS-CPS can be used to construct valid measures of cigarette prices. Unlike the TBOT, the TUS-CPS captures the effect of price-reducing marketing strategies, as well as tax avoidance practices and non-traditional types of purchasing. Thus, self-reported data like TUS-CPS appear to have advantages over TBOT in estimating the ‘real’ price that smokers face.

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