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As for any other commodity, demand for tobacco responds to price changes: when prices rise, demand for tobacco falls. Price increases encourage cessation,1 reduce average cigarette consumption among continuing smokers,2 and deter initiation.3 Tax increases are thus widely accepted as a key component of tobacco control policy.4–6
In calling for increases in tobacco tax, tobacco control advocates often find it useful to compare cigarette prices internationally with those in their own country. To do this, they must somehow convert prices in other countries using a standard measure, most commonly the price in $US. Exchange rates, however, may be …