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Predicting decreases in smoking with a cigarette purchase task: evidence from an excise tax rise in New Zealand
  1. Randolph C Grace1,
  2. Bronwyn M Kivell2,
  3. Murray Laugesen3
  1. 1Department of Psychology, University of Canterbury, Christchurch, New Zealand
  2. 2Victoria University of Wellington, School of Biological Sciences, Wellington, New Zealand
  3. 3Health New Zealand, Ltd, Lyttelton, New Zealand
  1. Correspondence to Professor Randolph C Grace, Department of Psychology, University of Canterbury, Christchurch 8041, New Zealand; randolph.grace{at}canterbury.ac.nz

Abstract

Background Tobacco excise taxes are known to be effective in reducing smoking at the population level, but less research has examined how individual smokers respond to changes in tax policy. We ask whether price elasticities for individual smokers, derived from simulated demand curves obtained with a cigarette purchase task (CPT), can predict changes in smoking after a tax increase.

Method Smokers (N=357) were recruited from four New Zealand cities and interviewed before and after a 10% tobacco excise tax increase.

Results Simulated demand curves from the CPT were curvilinear and well described by an exponential model. Smokers reported significant reductions in cigarettes/day and addiction scores at Wave 2 (n=226). Local elasticities derived from the demand curves significantly predicted decreases in cigarettes/day after controlling for covariates.

Conclusions Elasticities from simulated demand curves can predict decreases in consumption for individual smokers after an excise tax increase. Understanding individual differences in tobacco demand curves may help to predict how different groups of smokers will respond to price increases.

  • Cessation
  • Economics
  • Taxation
  • Price
  • Addiction

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