The Effect of Prices on Cigarette Use Among Youths in the Global Youth Tobacco Survey

Silda Nikaj; Frank J. Chaloupka

doi:10.1093/ntr/ntt019

The Effect of Prices on Cigarette Use Among Youths in the Global Youth Tobacco Survey

Silda Nikaj¹ and
Frank J. Chaloupka²

¹ Department of Economics, Texas Christian University, Fort Worth, TX;
² Department of Economics, Health Policy Center, Institute for Health Research and Policy, University of Illinois at Chicago, Chicago, IL

Corresponding Author: Silda Nikaj, Department of Economics, Texas Christian University, TCU Box 298510, Fort Worth, TX 76129, USA. Telephone: 817-257-6283; Fax: 817-257-5058; E-mail: s.nikaj{at}tcu.edu

Received September 19, 2012.
Accepted January 28, 2013.

Abstract

Introduction: We estimate the impact of cigarette prices on youth smoking in 38 countries of the Global Youth Tobacco Survey.

Methods: We use a 2-part model of cigarette demand. In the first part, we estimate the impact of prices on the decision to smoke. Conditional on smoking, we then estimate the effect of price on the number of cigarettes smoked. We employ 2-way fixed effects to address country-level time-invariant heterogeneity and control for an array of local-level variables to address local-level heterogeneity.

Results: The estimated total price elasticity is −1.5 for a sample that contains both high-income and low- and middle-income countries. Constraining the sample to only low- and middle-income countries, we find a total price elasticity of −2.2, suggesting that smoking among youths in low-income countries is more responsive to cigarette price changes.

Conclusion: Cigarette price increases are highly effective in reducing smoking prevalence and consumption among youths globally, and particularly among youths in low- and middle-income countries.