Price elasticity of demand for manufactured cigarettes and roll-your-own cigarettes…
Price elasticity of demand for manufactured cigarettes and roll-your-own cigarettes across socioeconomic status groups in Thailand | Authors conclude that, “low income smokers were more responsive to price change than those with higher income. The effectiveness of pricing policy in reducing demand for manufactured cigarettes was greater in domestic cigarettes than imported ones.” https://tobaccocontrol.bmj.com/content/early/2020/08/19/tobaccocontrol-2019-055480
Abstract
Background Pricing policies have been proven to be effective in reducing tobacco consumption. However, studies investigating the effectiveness of pricing policies across different types of tobacco products and socioeconomic status (SES) groups are limited, particularly in low-income and middle-income countries.
Objective This study aimed to quantify the price elasticity of demand for different types of cigarettes across different SES groups.
Methods This study used data from a nationally representative survey in Thailand conducted in 2017 and included current smokers aged at least 15 years. To quantify the price elasticity of demand for cigarette consumption, a two-part model was employed for five different types of cigarettes: domestic and imported manufactured cigarettes with a low and high price, and roll-your-own cigarettes. Personal income was used to determine SES.
Results Price elasticity of demand for cigarettes exists for all types of cigarettes. The price elasticity of demand for manufactured and roll-your-own cigarettes was −0.49 (p<0.05) and −0.32 (p<0.05), respectively. People who smoked domestic manufactured cigarettes were more responsive to price change than those who smoked imported manufactured cigarettes. Low-income smokers of manufactured and roll-your-own cigarettes were more responsive to price change than those with high income.
Conclusion Smokers with a low income were more responsive to price change than those with higher income. The effectiveness of pricing policy in reducing demand for manufactured cigarettes was greater in domestic cigarettes than imported ones.
by Stephen Hamann
