POST Online Media Lite Edition


NEWLY REPORTED COVID-19 CASES IN LAST 24 HOURS (5.14.2021, 12:20pm CEST, WHO):   U.S. 35,437    India 343,144    Brazil 76,692    France 21,269    Turkey 13,029    Russia 8,217    The United Kingdom 2,284    Italy 7,848    Spain 3,210    Germany 17,419    Argentina 24,475    Columbia 16,993    Poland 3,423    Iran 14,246    Mexico 3,090    Ukraine 6,813    Peru 7,400    Indonesia 3,448    Czechia 1,280    South Africa 2,759    The Netherlands 6,422    Canada 6,198    Chile 6,153    Iraq 4,512    Philippines 6,385    Sweden 6,333    Pakistan 3,265    Hungary 1,416    Bangladesh 1,290    Serbia 1,046    Japan 6,918    Austria 1,197    United Arab Emirates 1,512    Malaysia 4,855    Nepal 8,842    Saudi Arabia 1,116    Ecuador 1,151    Greece 2,478    Croatia 1,064    Bolivia 2,290    Paraguay 2,828    Kuwait 1,059    Costa Rica 3,173    Lithuania 1,207    Denmark 1,246    Egypt 1,193    Uruguay 2,255    Bahrain 1,816    Sri Lanka 3,269    Cuba 1,186    Thailand 2,256    Maldives 1,216    China 35    Singapore 34    New Zealand 1    Australia 8    South Korea 747   

Increasing cigarette taxes shifts consumers to more dangerous products

Staff writer |
Increasing cigarette exercise taxes may have the unintended consequence of encouraging consumers to seek higher nicotine content and more dangerous cigarette products.

Article continues below

This is according to a study published in Marketing Science, a journal of the Institute for Operations Research and the Management Sciences (INFORMS).

The Unintended Consequences of Counter-Marketing Strategies is by Yanwen Wang, the University of Colorado Boulder; Mike Lewis, Emory University; and Vishal Singh, New York University.

The study shows that while counter-marketing techniques often reduce total consumption of cigarettes, increasing cigarette taxes per package shifts some consumers to higher nicotine products. Given the addictive properties of nicotine this result increases addiction levels for some consumers.

Over the past 50 years, regulators and advocacy groups have increasingly used marketing tools to discourage cigarette consumption. Excise taxes are used to increase prices faced by consumers.

Educational advertising is used to increase awareness of health risks and decrease preferences for the category. Smoke-free policies are used to make cigarette consumption less convenient.

"One interesting element of tobacco counter-marketing is that policies tend to be established and implemented at the state level," Yanwen Wang said.

"This is important because the variation in policies across states enables natural experiments with different approaches. These natural experiments allow researchers to determine the relative effectiveness of different anti-smoking efforts."

The authors study how counter-marketing efforts impact overall cigarette consumption and the choice between regular and low nicotine products using store level sales data provided by IRI.

By conducting the analysis on nationwide data about store sales, the researchers examine populations of consumers that are exposed to different tax rates, advertising levels, and smoking prohibitions.

In addition, data from the US Census on ZIP code demographics allow the researchers to examine the effectiveness of counter-marketing across consumers of different socio-economic levels.

"We find that the different anti-smoking techniques varied in terms of effectiveness," Mike Lewis noted.

"Taxes that directly increase the prices faced by consumers are the most effective technique in reducing consumption of cigarettes. Health-oriented advertising is also effective. Smoke-free air policies such as restaurant or workplace bans on smoking are the least effective."

"However, while taxes are the most effective technique reducing smoking rates, we find that this tool has a significant downside," Vishal Singh added.

"Because cigarette taxes are currently applied at the per pack level and without regard to nicotine levels, consumers may respond to increasing cigarette taxes by switching to higher nicotine products.

"In other words, if consumers desire to minimize the cost per unit of nicotine, then increasing cigarette taxes may lead some consumers to shift to higher nicotine products."

This unintended consequence of cigarette taxes can have significant health consequences since higher nicotine levels will increase addiction levels."

What to read next

Flavoured e-cigarette users may be exposed to harmful chemical
Significant drop as teen cigarette smoking hits 7%
Products that contain nicotine are not harmless