Higher tobacco prices leads to declining useACTA
Cape Town – In the context of declining tobacco use on a global level, tobacco use in sub-Saharan Africa is predicted to increase substantially in the coming decades.
This is the result of fast economic and population growth, coupled with intensive marketing efforts by the tobacco industry.
Tobacco use is a leading cause of death and disease and imposes significant economic costs on society.
Increasing the excise tax on tobacco products can serve as a powerful tool for reducing the demand for these products because tax increases raise the price of tobacco products, which renders them less affordable.
Higher prices result in lower smoking prevalence because fewer people start smoking, more people quit and continuing smokers reduce the intensity of tobacco consumption by limiting the number of cigarettes that they smoke.
While the inverse association between tobacco product prices and demand for these products is well established at the international level, policymakers typically demand local evidence before implementing policy changes.
In the African context, research on the relationship between cigarette prices and smoking outcomes is scarce, which may be a factor contributing to the observed policy stasis.
According to the most recent report on the Global Tobacco Epidemic published by the WHO, countries in sub-Saharan Africa have among the lowest tobacco excise taxes in the world.
A new study that I conducted in the Research Unit on the Economics of Excisable Products (REEP) in the School of Economics at UCT, which was recently published in the British Medical Journal Tobacco Control, sought to address this research gap by analysing the association between cigarette prices and smoking outcomes in eight sub-Saharan African countries.
Countries included in the analysis are Botswana, Cameroon, Ethiopia, Kenya, Nigeria, Senegal, Tanzania and Uganda.
The study, which is based on a sample of 51 270 individuals from these eight African countries, finds that cigarette prices are a statistically significant predictor of both smoking participation and smoking intensity.
Specifically, the results show that higher cigarette prices are associated with reductions in both smoking prevalence and smoking intensity among people in the sampled countries.
Economists use a concept called the “price elasticity of cigarette demand” to measure the responsiveness of cigarette consumption to changes in cigarette prices.
The new research estimates that the price elasticity of smoking prevalence in the sample is -0.36, meaning that a 10% increase in cigarette prices is associated with a 3.6% decrease in smoking prevalence in the eight sub-Saharan African countries in the sample.
On the matter of smoking intensity, the research estimates that a 10% rise in cigarette prices will reduce the number of cigarettes smoked by continuing smokers by 1.33%.
The paper also finds that the impact that higher prices have on the number of cigarettes smoked by continuing smokers decreases with the number of years that a person has been a smoker.
Taken together, the research shows that, for this sample of African countries, the biggest impact of a price-led decrease in the demand for cigarettes is on smoking prevalence rather than smoking intensity.
This finding has fortuitous public health implications.
The epidemiological literature clearly shows that the public health impact of people quitting smoking is much greater than continuing smokers cutting back on the number of cigarettes that they smoke.
This finding for these eight African countries makes an increase in the excise tax a more potent tool for reducing the death toll from cigarette use than would be the case if the primary impact was on reducing smoking intensity.
This research provides governments on the continent with locally relevant evidence on the link between cigarette prices and smoking outcomes.
Filby is with the Research Unit on the Economics of Excisable Products, School of Economics at the University of Cape Town.