The demand for cigarettes: New evidence from South Africa

Mukong, Alfred Kechia; Tingum, Ernest Ngeh

doi:10.1080/0376835x.2019.1640108

Cited by 13 publications

(18 citation statements)

References 29 publications

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“…Studies from multiple Sub-Saharan African countries [11], as well as specific-country studies, including from South Africa [12], Tanzania [13], Uganda [14], and Zambia [15], have confirmed that higher cigarette prices reduced smoking prevalence and intensity of use. Previous international research has found that youth are even more price-responsive than adults [16], making tobacco taxation particularly effective in countries with high population growth, where measures aimed at youth smoking are especially needed.…”

Section: Introductionmentioning

confidence: 99%

Effects of Prices on Youth Cigarette Smoking and Tobacco Use Initiation in Ghana and Nigeria

Asare

Stokłosa

Drope

et al. 2019

IJERPH

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Background: Population growth in the African region is set to outpace the rate of decline in smoking prevalence, leading to a projected increase in the total number of smokers. As most tobacco users initiate during their adolescent years, tobacco prevention strategies targeting youth will be particularly important. Methods: This study estimated the impact of cigarette prices on youth cigarette smoking and tobacco use initiation in Ghana and Nigeria using the Global Youth Tobacco Survey data. First, we used cross-section data and logit models to estimate the effects of prices on youth cigarette smoking. Second, we created pseudo longitudinal data and used continuous-time hazard models to evaluate the impact of cigarette prices on tobacco use initiation. Results: We found that higher cigarette prices decreased both 30-day cigarette smoking and tobacco use onset significantly in both Ghana and Nigeria. Additionally, the price elasticity of cigarette smoking and tobacco use initiation ranged from −0.44 to −1.13, and −1.04 to −3.66, respectively. Conclusions: As one of the first studies on youth tobacco consumption in Sub-Saharan Africa, this study strongly suggests that policies that increase real cigarette prices can lower both cigarette smoking and tobacco use initiation among youth in Ghana and Nigeria.

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Section: Introductionmentioning

confidence: 99%

Effects of Prices on Youth Cigarette Smoking and Tobacco Use Initiation in Ghana and Nigeria

Asare

Stokłosa

Drope

et al. 2019

IJERPH

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“…A recent study in South Africa using longitudinal data obtained from the South Africa National Income and Dynamic Study obtained negative price elasticity of demand for cigarettes, with significantly larger price elasticity estimates from the two-part model. The study found that price elasticity varies between -0.43 for economy brand cigarettes and 0.69 for the mid-price brands 13 . However, the study did not account for non-price tobacco control policies in the estimation of elasticities.…”

Section: Discussionmentioning

confidence: 95%

“…While this decline is attributed mainly to the increase in excise taxes, the influence of numerous non-pricing policies, including banning tobacco advertising and sponsorship, as well as banning smoking in public and work places, cannot be ignored. In addition, smoking prevalence is still significantly high among adults 13 . Recent evidence from individual-level panel data indicates that the conditional price elasticity of demand for cigarettes in South Africa decreased from -0.305 to -0.303, after controlling for non-pricing policies 14 .…”

Section: Introductionmentioning

confidence: 99%

“…This study addresses the evidence gap by estimating the combined impact on consumption of price changes, changes in legislation, and changing market structure where the tobacco industry experienced a transition from a near monopoly to a more competitive market structure 13 . We show that ignoring antismoking legislation overstates the price effects but understates the income effects both in the long-term and the short-term.…”

Section: Introductionmentioning

confidence: 99%

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The effects of price and non-price policies on cigarette consumption in South Africa

Tingum¹,

Mukong²,

Mdege³

2020

Tob. Induc. Dis.

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implemented around the world with the objective of increasing the cost of purchasing tobacco products and reducing tobacco consumption. Previous evidence has shown that increased cigarette prices are one of the most effective tobaccocontrol strategies in reducing tobacco consumption 2. On the other hand, relatively little attention has been given to the effect of non-pricing tobacco legislation. The literature on the elasticity of demand for cigarettes can be classified into two strands. The first strand, quite sizable, completely ignores the role of nonpricing policies when estimating the price elasticity of demand for cigarettes 2. The other strand accounts ABSTRACT INTRODUCTION The health consequences of smoking are serious and have been frequently detailed. A reduction in tobacco-related mortality hinges upon the ability to reduce tobacco usage. There is overwhelming evidence that higher cigarette prices reduce the demand for cigarettes, but little is known about the combined effect of price and non-price policies. This paper seeks to extend the analysis of price elasticities by estimating the combined effect of changes in price and non-price legislations in South Africa. METHODS Annual time-series data from 1961 to 2016 are used, with a policy index constructed to capture the instances of non-price tobacco legislation. We estimate the combined impact of changes in tobacco control policy on cigarette consumption using a vector error correction model (VECM) and a two-stage least squares (2SLS) model. RESULTS The estimated long-run own-price elasticities lie between-0.55 and-0.72, while the income elasticities lie between 0.39 and 0.49. The coefficients of the changing tobacco control policies and the changing market structure show that they contribute to a modest reduction in cigarette consumption. The short-run deviations from the steady state are presented using the error correction term (ECT). CONCLUSIONS Cigarette demand is responsive to cigarette prices and non-pricing policies but failure to control for non-pricing policies overstates the price effect. This suggests that both cigarette prices and non-pricing legislation are effective in reducing cigarette consumption.

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“…For middle-income countries, while there are figures on the responsiveness of smoking participation to price for countries such as Russia and South Africa, actual estimates of PPE are scarce 18–20. An estimate of the PPE of −0.06 was obtained for China 21.…”

Section: Introductionmentioning

confidence: 99%

Price smoking participation elasticity in Colombia: estimates by age and socioeconomic level

2020

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BackgroundTobacco prevalence in Colombia is small compared with other Latin America despite the nation’s tobacco taxes being among the lowest in the region. However, tobacco taxes have increased several times during the last decade, and large increases in 2010 and 2016 impacted consumer prices.ObjectiveThis paper aims to estimate the price smoking participation elasticity (PPE) in Colombia, with specific reference to regional increases in consumer prices after 2010 tax policy changes.MethodsThe PPE is computed using logistic regression based on individual-level data from the National Psychoactive Substances Consumption Survey for 2008 and 2013. Our specific focus is state-level variation in Colombian cigarette prices between 2008 and 2013 induced by the tax hike in 2010.ResultsThe estimated PPE in Colombia is around −0.66 (p value=0.046). We find almost no differences across socioeconomic level, but price sensitivity was greater for women than men, and for relatively older individuals (ages 51–64).ConclusionsPPE for Colombia is above estimates for comparable middle-income countries such as Mexico. As a result, current estimates for health gains of tax policies are likely to be underestimated. Moreover, in contrast with the literature, we find that the PPE for the youth (≤25 years) is lower than older age groups, and there is no evidence of a prominent socio-economic status (SES) gradient.

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The demand for cigarettes: New evidence from South Africa

Cited by 13 publications

References 29 publications

Effects of Prices on Youth Cigarette Smoking and Tobacco Use Initiation in Ghana and Nigeria

Effects of Prices on Youth Cigarette Smoking and Tobacco Use Initiation in Ghana and Nigeria

The effects of price and non-price policies on cigarette consumption in South Africa

Price smoking participation elasticity in Colombia: estimates by age and socioeconomic level

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