Brief report
Cigarette Price-Minimization Strategies by U.S. Smokers

https://doi.org/10.1016/j.amepre.2013.01.019Get rights and content

Background

Smokers may react to cigarette excise tax increases by engaging in price-minimization strategies (i.e., finding ways to reduce the cost of cigarette smoking) rather than by quitting or reducing their cigarette use, thereby reducing the public health benefits of such tax increases.

Purpose

To evaluate the state and national prevalence of five common cigarette price-minimization strategies and the size of price reductions obtained from these strategies.

Methods

Using data from the 2009–2010 National Adult Tobacco Survey, the prevalence of five common price-minimization strategies by type of strategy and by smoker's cigarette consumption level were estimated. The price reductions associated with these price-minimization strategies also were evaluated. Analyses took place in November 2012.

Results

Approximately 55.4% of U.S. adult smokers used at least one of five price-minimization strategies in the previous year, with an average reduction of $1.27 per pack (22.0%). Results varied widely by state.

Conclusions

Cigarette price-minimization strategies are practiced widely among current smokers, and resulting price reductions are relatively large. Policies that decrease opportunities to effectively apply cigarette price-minimization strategies would increase the public health gains of cigarette excise tax increases.

Section snippets

Background

Increases in cigarette prices have been shown to prevent smoking initiation, increase rates of smoking cessation, and reduce the overall consumption of cigarettes.1, 2, 3, 4 The most effective way for governments to increase cigarette prices is to increase excise taxes.1, 2, 3 However, rather than quitting or reducing their cigarette use, some smokers may react by using price-minimization strategies (i.e., finding ways to save money on cigarettes), thereby reducing the public health impact of

Methods

Data used for this analysis are restricted to 14,891 current smokers who participated in the NATS from October 2009 through June 2010 and who reported values to questions related to cigarette consumption and price paid. The NATS, a stratified landline and cell phone–based survey of tobacco use among non-institutionalized U.S. adults (aged ≥18 years) conducted by the CDC, was designed to assess the prevalence of and factors related to tobacco use at both the national and state levels.

The

Results

At least 55.4% of U.S. adult smokers used one or more price-minimization strategies in the previous year (Table 1). Among the five price-minimization strategies, the most frequently used were purchasing generic brands and purchasing cigarettes by the carton (25.0% and 24.3%, respectively). Making use of coupons or other price-related promotions (19.8%) were somewhat less common. More than 7.0% had purchased cigarettes from Indian reservations in the previous year, and 1.2% had purchased

Discussion

At least 55.4% of U.S. adult smokers engaged in legal activities that reduced the price they paid for cigarettes, and smokers who engaged in these activities paid a substantially lower price than those who did not. Consistent with evidence on the impacts of price-minimization strategies on the pass-through rates of cigarette excise taxes,17, 18, 19 these results suggest that rather than quitting in reaction to a cigarette excise tax increase, price-sensitive smokers may have low-priced

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      As such, particularly following tax increases, price sensitive smokers engage in a variety of price-minimization strategies made available to them by the tobacco industry, including the redemption of coupons (Choi and Boyle, 2018; Hyland et al., 2005; Xu et al., 2013). In the US, approximately 12% of adult nonsmokers, and 35% to 49% of adult smokers receive direct marketing coupons and price promotions, primarily for cigarettes (Choi et al., 2013; Choi et al., 2018a; Choi et al., 2018b; Lewis et al., 2004a), and nearly 20% to 40% of adults smokers redeem coupons when purchasing tobacco products (Choi et al., 2013; Lewis et al., 2004a; Lewis et al., 2015; Xu et al., 2013). Rates of coupon redemption for cigarettes are staggering high at 70%–80% among adult smokers who receive direct mail from tobacco companies (Choi et al., 2013; Lewis et al., 2015).

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