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Trends and affordability of cigarette prices: ample room for tax increases and related health gains
  1. G E Guindon1,
  2. S Tobin2,
  3. D Yach3
  1. 1World Health Organization, Tobacco Free Initiative, Geneva, Switzerland
  2. 2Organisation for Economic Co-Operation and Development, Paris, France
  3. 3World Health Organization, Noncommunicable Diseases and Mental Health, Geneva, Switzerland
  1. Correspondence to:
 G Emmanuel Guindon, World Health Organization, Tobacco Free Initiative, Avenue Appia 20, 1211 Geneva 27, Switzerland;
 guindone{at}who.int

Footnotes

  • * Affordability is defined as cost in terms of income.

  • Grossman and colleagues2 conclude that one consistent result throughout most price elasticity studies is that about 50% of the change generated by price increases is caused by a reduction in consumption among remaining smokers. More recently, Harris,3 Chaloupka and Wechsler,4 and Farrelly and Bray5 found similar results.

  • For recent development on cigarette smuggling issues, see Action on Smoking and Health web site http://www.ash.org.uk/?smuggling

  • § The Economist Intelligence Unit, part of The Economist Group, is a business information provider with offices in London, New York, HongKong Special Administrative Region of China, Singapore, and Cambridge (USA).

  • Where the Marlboro brand is not available, the EIU surveys the nearestequivalent international brand. For example, in Zimbabwe where theMarlboro brand is not available, the data refers to Benson and Hedgesand Dunhills.

  • ** Cigarette prices can be significantly different within countries.

  • †† For more details on the advantages and disadvantages of using theBig Mac as an indicator of PPP see Pakko and colleagues20and The Economist Big MacCurrencies, 29 April 2000. URL: http://www.economist.com/markets/bigmac/displaystory.cfm?story_id=305167

  • ‡‡ Average wages are based on actual wages in 12 occupations aftertaking into account working time, holidays, and vacations. The 12occupations are: primary school teachers, bus drivers, automobilemechanics, building labourers, skilled industrial workers, cooks,department managers, electrical or mechanical engineers, bank creditclerks, secretaries, saleswomen, and female industrial workers.

  • §§ Correlation coefficient ( r) between annual changes in real price andannual change in minutes of labour is 0.55 for Marlboro and 0.53 forlocal brand (n = 35).

  • ¶¶ Correlation coefficients between real change in prices (Marlboro andlocal brand) and gross domestic product per capita at PPP in the year2000 are 0.45 and 0.29 (n = 67 and n = 63), respectively. The 2000per capita gross domestic product PPP data were obtained from the EIU(http://countrydata.bvdep.com/).

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Footnotes

  • * Affordability is defined as cost in terms of income.

  • Grossman and colleagues2 conclude that one consistent result throughout most price elasticity studies is that about 50% of the change generated by price increases is caused by a reduction in consumption among remaining smokers. More recently, Harris,3 Chaloupka and Wechsler,4 and Farrelly and Bray5 found similar results.

  • For recent development on cigarette smuggling issues, see Action on Smoking and Health web site http://www.ash.org.uk/?smuggling

  • § The Economist Intelligence Unit, part of The Economist Group, is a business information provider with offices in London, New York, HongKong Special Administrative Region of China, Singapore, and Cambridge (USA).

  • Where the Marlboro brand is not available, the EIU surveys the nearestequivalent international brand. For example, in Zimbabwe where theMarlboro brand is not available, the data refers to Benson and Hedgesand Dunhills.

  • ** Cigarette prices can be significantly different within countries.

  • †† For more details on the advantages and disadvantages of using theBig Mac as an indicator of PPP see Pakko and colleagues20and The Economist Big MacCurrencies, 29 April 2000. URL: http://www.economist.com/markets/bigmac/displaystory.cfm?story_id=305167

  • ‡‡ Average wages are based on actual wages in 12 occupations aftertaking into account working time, holidays, and vacations. The 12occupations are: primary school teachers, bus drivers, automobilemechanics, building labourers, skilled industrial workers, cooks,department managers, electrical or mechanical engineers, bank creditclerks, secretaries, saleswomen, and female industrial workers.

  • §§ Correlation coefficient ( r) between annual changes in real price andannual change in minutes of labour is 0.55 for Marlboro and 0.53 forlocal brand (n = 35).

  • ¶¶ Correlation coefficients between real change in prices (Marlboro andlocal brand) and gross domestic product per capita at PPP in the year2000 are 0.45 and 0.29 (n = 67 and n = 63), respectively. The 2000per capita gross domestic product PPP data were obtained from the EIU(http://countrydata.bvdep.com/).

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