Table 1

Evidence for effectiveness of tax and price policies in tobacco control

	Conclusion statements	Evidence			Comments and references
	Conclusion statements	Sufficient^*	Strong^†	Limited^‡	Comments and references
1	Increases in tobacco excise taxes that increase prices result in a decline in overall tobacco use	X			There is a negative relationship between cigarette prices and cigarette consumption in countries at all levels of income based on aggregated data. Individual-level or household-level data corroborate an inverse relationship between cigarette price and total demand.4 5
2	Increases in tobacco excise taxes that increase prices reduce the prevalence of adult tobacco use	X			Studies based on survey data, prevalently from the US, support this association, including for products other than cigarettes. Studies from other high-income countries support this finding. Survey data from low-income and medium-income countries present challenges reflected in a large variation in price elasticities^§ and yet these studies tend to corroborate the findings from high-income countries.6–8
3	Increases in tobacco excise taxes that increase prices induce current tobacco users to quit	X			A small number of studies from high-income countries report that higher prices increase smoking cessation9–11
4	Increases in tobacco excise taxes that increase prices reduce the prevalence of tobacco use among young people	X			Studies from low-income, medium-income and high-income countries find that smoking prevalence among young people decreases as prices increase12–14
5	Increases in tobacco excise taxes that increase prices reduce the initiation and uptake of tobacco use among young people, with a greater impact on the transition to regular use	X			Youth smoking initiation is responsive to changes in cigarette prices, with the price response being positively related to higher thresholds of smoking initiation in studies with longitudinal data15 16
6	Increases in tobacco excise taxes that increase prices lower the consumption of tobacco products among continuing users	X			Studies from low-income, medium-income and high-income countries find that smoking intensity decreases as prices increase6 17
7	Tobacco use among young people responds more to changes in tobacco product taxes and prices than does tobacco use among adults	X			Studies that consider differences in price responsiveness by age from several countries generally find that tobacco use among young people will fall more in response to a price increase than will tobacco use among older people6 18
8	The demand for tobacco products in low-income countries is more responsive to price than is the demand for tobacco products in high-income countries			X	There is evidence supporting this for many countries but with some exceptions, particularly where tobacco products have become increasingly affordable19
9	In high-income countries, tobacco use among lower-income populations is more responsive to tax and price increases than is tobacco use among higher-income populations		X		Some studies find no differences, but the majority of studies are consistent with economic theory in finding that tobacco use among lower-income populations responds more to price6 8 20
10	In low-income and middle-income countries, tobacco use among lower-income populations is more responsive to tax and price increases than is tobacco use among higher-income populations			X	Relatively few studies from low-income and middle-income countries assess differences in price responsiveness by income, with some finding greater response among lower-income populations while others find little difference7 21 22
11	Changes in the relative prices of tobacco products lead to some substitution to the products for which the relative prices have fallen		X		Increases in cigarette taxes have been associated with higher use of other types of products (ie, smokeless) or other brands of the same type of product23 24
12	Tobacco industry (TI) price discounting strategies, price-reducing marketing activities and lobbying efforts mitigate the impact of tobacco excise tax increases	X			Marketing techniques that reduce price include price discounts, sampling, specialty item distribution, coupons, others. The resulting reductions in price increase tobacco use. Tobacco companies lobbying efforts to influence tobacco tax levels, structures and the earmarking of tobacco tax revenues have been effective in deterring some governments from raising taxes.25–28
13	Tobacco tax increases that increase prices improve population health	X			The reductions in tobacco use that result from higher taxes and prices lead to reductions in the death and disease caused by tobacco use29 30
14	Higher and more uniform specific tobacco excise taxes result in higher tobacco product prices and increase the effectiveness of taxation policies in reducing tobacco use	X			Specific excise taxes (those assessed based on quantity or weight) have a greater public health impact than ad valorem excise taxes (those assessed based on value) because they lead to relatively higher tobacco product prices31
15	Tax avoidance^¶ and tax evasion^** reduce, but do not eliminate, the public health and revenue impact of tobacco tax increases	X			Experiences in many countries demonstrate that tobacco use falls and revenues rise following a tax increase, even when there is increased tax avoidance and evasion32 33
16	A coordinated set of interventions that includes international collaborations, strengthened tax administration, increased enforcement and swift, severe penalties reduces illicit trade in tobacco products		X		Countries have successfully reduced illicit trade in tobacco products through strong and coordinated multilateral efforts. However, relatively few countries have adopted comprehensive interventions and their longer-term impact is not known or difficult to assess given that forms of tax avoidance/evasion can adapt/change in response to interventions to crack down on them.34
17	Tobacco tax increases increase tobacco tax revenues	X			Higher tax rates result in higher tax revenues given that taxes account for a fraction of prices and that reductions in consumption are usually less than proportional to the increases in price that result from higher taxes19
18	Tobacco tax increases do not increase unemployment		X		Job losses in tobacco-dependent sectors are offset by increases in other sectors35–37

The World Bank classification of countries by income include, according to the 2008 gross national income per capita, calculated using the World Bank Atlas methods. High income: US$11 906 or more; upper middle income: US$11 905–$3856; lower middle income: US$3855–$976; low income: US$975 or less (for the list of countries, see http://data.worldbank.org/about/country-classifications/country-and-lending-groups#Low_income).
↵* Sufficient evidence: an association has been observed between the intervention under consideration and a given effect in studies in which chance, bias and confounding can be ruled out with reasonable confidence. The association is highly likely to be causal.
↵† Strong evidence: there is consistent evidence of an association, but evidence of causality is limited by the fact that chance, bias or confounding have not been ruled out with reasonable confidence. However, explanations other than causality are unlikely.
↵‡ Limited evidence: there is some evidence of association between the intervention under consideration and a given effect, but alternative explanations are possible.
Other available criteria: ‘Evidence of No Effect’, methodologically sound studies consistently demonstrate the lack of an association between the intervention under consideration and a given effect; ‘Inadequate/No Evidence’, there are no available methodologically sound studies showing an association—the available studies are of insufficient quality, consistency or statistical power to permit a conclusion regarding the presence or absence of a causal association between the intervention and a given effect. Alternatively, this category was used when no studies are available.
↵§ Price elasticity of demand, which is a number without units, indicates by what percentage the quantity demanded changes in response to a 1% change in the price.
↵¶ Tax avoidance includes legal activities and purchases in accordance with customs and tax regulations, most of which include the payment of some tobacco taxes, and are undertaken by individual tobacco users, including crossborder shopping, tourist shopping, duty free shopping, internet and other direct purchases, industry reformulation and/or repositioning.
↵** Tax evasion includes illegal methods of circumventing tobacco taxes, such as the purchase of smuggled and illicit manufactured tobacco products. Those activities include small and large quantities and often, but not always, involve efforts to avoid paying any taxes (ie, small scale smuggling, large scale smuggling, illicit manufacturing, counterfeiting). Many of these activities are undertaken by larger criminal networks or other large-scale operations.