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Original research
Cigarette taxation and price differentials in 195 countries during 2014–2018
  1. Anthony A Laverty1,
  2. Chaorui Raymond Li1,
  3. Kiara C-M Chang2,
  4. Christopher Millett3,
  5. Filippos T Filippidis1
  1. 1 School of Public Health, Imperial College London, London, UK
  2. 2 Public Health Policy Evaluation Unit, Imperial College London, London, UK
  3. 3 Primary Care and Social Medicine, Imperial College London, London, UK
  1. Correspondence to Dr Anthony A Laverty, Imperial College London, London, UK; a.laverty{at}imperial.ac.uk

Abstract

Introduction Raising tobacco prices via increased taxation may be undermined by tobacco industry tactics to keep budget cigarettes on the market. Price differentials between budget and premium cigarettes allow smokers to trade down in the face of average price rises thus attenuating health benefits. This study examines global trends of price differentials and associations with taxation.

Methods Ecological analysis of country-level panel data of 195 countries’ price differentials was performed and compared against total, specific excise, ad valorem and other taxation. Price differentials were expressed as the difference between budget cigarette and premium pack prices (as % of premium pack prices). Two-level linear regression models with repeated measurements (2014, 2016 and 2018) nested within each country assessed the association between country-level taxation structures and price differentials, adjusted for year, geographical region and income group.

Results Worldwide, median price differential between budget and premium 20-cigarette packs was 49.4% (IQR 25.9%–70.0%) in 2014 and 44.4% (IQR 22.5%–69.4%) in 2018 with significant regional variation. The largest price differentials in 2018 were in Africa, with the lowest in Europe. Total taxation was negatively associated with price differentials (−1.5%, 95% CI −2.5% to −0.4% per +10% total taxation) as was specific excise taxation (−2.5%, 95% CI −3.7% to −1.2% per +10% specific excise tax). We found no statistically significant association between ad valorem taxation and price differentials.

Conclusion Total levels of taxation and specific excise taxes were associated with smaller price differentials. Implementing high specific excise taxes may reduce price differentials and improve health outcomes.

  • taxation
  • smoking caused disease
  • tobacco industry

Data availability statement

Data are available in a public, open access repository. All data came from relevant WHO reports and can be accessed there.

https://doi.org/10.1136/tobaccocontrol-2021-056682

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    Data availability statement

    Data are available in a public, open access repository. All data came from relevant WHO reports and can be accessed there.

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    Footnotes

    • Twitter @anthonylav

    • AAL and CL contributed equally.

    • Contributors CRL, KC-MC, AAL and FTF developed the initial research concept and design. CRL conducted all statistical analyses with the support of FTF and KC-MC. CRL had the lead role in drafting the manuscript and AAL in drafting the revision. All authors contributed to data interpretation, reviewed and edited the text, and have approved the final version of the manuscript. FF is the guarantor.

    • Funding The authors have not declared a specific grant for this research from any funding agency in the public, commercial or not-for-profit sectors.

    • Map disclaimer The inclusion of any map (including the depiction of any boundaries therein), or of any geographic or locational reference, does not imply the expression of any opinion whatsoever on the part of BMJ concerning the legal status of any country, territory, jurisdiction or area or of its authorities. Any such expression remains solely that of the relevant source and is not endorsed by BMJ. Maps are provided without any warranty of any kind, either express or implied.

    • Competing interests None declared.

    • Provenance and peer review Not commissioned; externally peer reviewed.

    • Supplemental material This content has been supplied by the author(s). It has not been vetted by BMJ Publishing Group Limited (BMJ) and may not have been peer-reviewed. Any opinions or recommendations discussed are solely those of the author(s) and are not endorsed by BMJ. BMJ disclaims all liability and responsibility arising from any reliance placed on the content. Where the content includes any translated material, BMJ does not warrant the accuracy and reliability of the translations (including but not limited to local regulations, clinical guidelines, terminology, drug names and drug dosages), and is not responsible for any error and/or omissions arising from translation and adaptation or otherwise.