Table 2

Selected observed estimates for the price elasticity of demand for tobacco products and the prevalence of smoking across income groups, various countries and time-periods

CountryTime-period of studyData, population and geographical settingEstimates of price elasticity of demand for tobacco productsCommentsSource
Aggregate demand estimates
InternationalVarious studies 1993–2004Cross-sectional, nationally representative studies.The central theme of this report is an examination of the effectiveness of tobacco taxation, and an in-depth summary of published literature is reviewed and synthesised. 50
USAAs above.As above.−1.00 to −0.10 (clustered around −0.60 to −0.20)As above. 50
Other high-income countriesAs above.As above.−1.20 to 0.00 (clustered around −0.60 to −0.20)As above. 50
Low-income and middle-income countriesAs above.As above.−1.00 to −0.20As above. 50
Latin America and the CaribbeanNot restricted.Various: systematic review and meta-analysis including 23 studies published between 1998 and 2015.−0.51 to −0.35Analyses included: 10 studies classified as ‘poor methodology/reporting’; five cross-country studies; five using aggregate-level data; two using household-level data. No studies with individual-level data. Limited data quality; quality assessment not formally conducted. 51
China1990–2007Used official national level statistics from China's statistics yearbook, China National Bureau of Statistics, China Tobacco Statistics Yearbook and China National Tobacco Company.−0.84 to −0.01China’s state-owned tobacco monopoly set prices for much of time-period but since 2001 foreign brands being sold. Prior to 2005 tobacco leaf was taxed at 31% of the retail price but reduced to 20% in 2006; cigarette taxes before 2009 included specific excise tax+ad valorem tax for higher priced products (class A). Tax structure has in 2009 changed (increased), but this is not covered by study time-period. 52
Demand estimates among the poor*
USA1993–2003Six pooled cross-sections from Current Population Survey (CPS) Tobacco Use Supplements merged with CPS March Income Supplements. Complete data for 294 693 adult respondents.-0.37 (poor) to -0.20 (rich)Published data for weighted average state price converted into real 1997 values using Consumer Price Index. Prices per cigarette and consumption of cigarettes per day. 33
USA1976–1993Six pooled cross-sections of data from the National Health Interview Survey administered to a nationally representative multistage probability sample of the non-institutionalised civilian population aged ≥18 years.−0.29 to −0.17Average real price of cigarettes for each state obtained using data reported by Tobacco Institute. 80% of overall response rate. 37
UK1972–1990Pooled biennial cross-sections using a random sample of UK adults interviewed for general household surveys.−1.00 to 0.00Tracks real price of cigarettes over time-period relative to other prices and average incomes. Prevalence defined by proportion of adults smoking >1 cigarette a day and combining number of cigarettes smoked per smoker by sex/age/SES group to yield average consumption per adult per group. 36
Canada1981–1999Eight cross-sections of household-level data from Canadian Survey of Family Expenditure, later renamed Survey of Household spending, comprising a total of 81 479 observations.−0.99 to −0.36Significant cross-province and time-series variation in both federal and provincial cigarette taxes over time-period including in excise taxes, excise duties and sales taxes. Average prices per 200 cigarettes for each province between 1989 and 1993 obtained from Statistics Canada and province-specific prices in other years used to extrapolate these figures to the rest of the period and combined with data on the total legal sales of cigarettes for each province. 35
Korea1998–2011Seven pooled cross-sections of individual smoking-related records from Korea National Health and Nutrition Examination Survey.−0.81 to −0.34Real price of a typical 20-cigarette pack used. Cigarette manufacturing industry was a government-owned monopoly setting prices until 2002, when the industry was privatised and prices deregulated. Premium brands introduced after 2002, but price of a typical pack remained unchanged with no substantial changes in cigarette taxes over time-period. Individual-level data. 43
Indonesia1999Single cross-section using Social and Economic Survey household data combining core and module questionnaires of 60 602 households. Average per person data derived using average household size.−0.67 to −0.31Information on cigarette price not available, but information on household expenditures and cigarettes consumption by brand available. Prices paid by smoker households estimated from data. Non-smoker household prices assumed similar to smoker households with similar SES and demographic profiles. 54
South Africa1990–1998Combination of subset of nationally representative cross-sectional datasets for urban respondents: income and expenditure surveys of 1990 and 1995; 1993 Southern African Labour and Development Research Unit survey; 1998 KwaZulu-Natal Income Dynamics Survey. Analyses performed on 16 903 observations. 1990 surveys are primarily urban based for the whole country; rural respondents are thus excluded from analyses.−1.39 to −0.81Price variation between brands noted to be remarkably low during time-period. Analyses investigate consumption patterns, and tobacco expenditures on cigarettes and other products but focus on cigarette expenditures given that these make the majority of total tobacco expenditures. 39
Thailand2000Cross-sectional household-level data from household socioeconomic survey (SES2000) with analyses based on 11 968 households spending some amount on tobacco monthly.−1.00 to −0.04Thais spend 3% of total expenditures on cigarettes. Since March 2001 excise tax has been 75% of the retail price. Cigarette expenditures compared with expenditures on other goods at the household level. 53
Turkey2003Single cross-section using Turkish Household Expenditure Survey (nationally representative, randomly selected households) for urban and rural areas in 12 regions. Total number of households of 25 764.−1.41 to −0.74Self-reported cigarette expenditures, and consumption and general expenditure patterns recorded at household level along demographic and other SES indicators. 44
Demand estimates among young people
InternationalVarious.Various.−1.44 to 0.00 29 45 50
Low-income and middle-income countries1999–2006Various: merged individual-level data from Global Youth Tobacco Survey with country-level data on local cigarette prices from Economist Intelligence Unit's World Cost of Living Survey. Final dataset with 315 355 individuals of 17 countries corresponding to 113 cities or provinces.−2.11 46 55
Low-income and middle-income countries1999–2008Various: estimates on cigarette prices on youth smoking derived in 38 countries having completed more than 1 wave of school-based Global Youth Tobacco Survey, and with income and price data.−2.20 55
High-income and low-income and middle-income countriesAs above.As above.−1.50 55
Difference in smoking prevalence across income† Difference in smoking prevalence across income
Low-income and middle-income countriesNot restricted.Various: summary of published studies.1–2 times higher prevalence among the poor (vs rich) 29
WHO regional analysesNot restricted.Various: systematic review and meta-analysis of 93 studies forming 164 datasets for 6 WHO regions. Time-period not specified, studies published between 1989 and 2013 included. 47
WHO Americas regionAs above.As above.1.4–1.7 times higher among poor
WHO Europe regionAs above.As above.1.3–1.6 times higher among poor
WHO Southeast Asia regionAs above.As above.1.1–2.0 times higher among poor
WHO Western Pacific regionAs above.As above.1.2–1.6 times higher among poor
WHO African regionAs above.As above.1.0–1.6 times higher among poor
  • For WHO definition of regional grouping:

  • *The price elasticity of demand is reported from the lowest (poor) to the highest (rich) income group for which it was estimated in the study.

  • †The ratio of smoking prevalence between the lowest (poor) and highest (rich) income group is reported for a group of countries as estimated in the study.

  • SES, socioeconomic status.