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.
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