Titled, “Investigating the Effects of Excise Taxes, Public Usage Restrictions, and Anti-smoking Ads Across Cigarette Brands,” the study found that tax hikes can disproportionately favour bigger brands, while tightened restrictions can hurt them.

To conduct the study, the researchers examined U.S. cigarette sales data from 2005 to 2010, and retail scanner data from 2006 to 2010. Additionally they analyzed a comprehensive data set that comprised of state-level cigarette taxes, state-level smoking restrictions and national anti-smoking advertising campaigns. The research team modeled the smokers’ brands and purchase quantities, and then looked at how the taxes, restrictions and ad campaigns affected their decisions and subsequent choices across different brands and price tiers.

The compiled data suggested that although cigarette taxes decrease smoking rates, they also result in a shift in market share toward stronger brands. “The major tobacco brands may be less affected by tax policies because their market power allows strong brands such as Marlboro to absorb rather than pass through increased taxes.”

The researchers also found that smoking restrictions tend to shift people away from the major brands, yet anti-smoking adverts are not very effective. “In contrast, smoke-free restrictions cause a shift away from stronger brands. In terms of anti-smoking advertising, the authors find minimal effects on brand choice and consumption.”

E-cig taxes lead to increased smoking rates

Meanwhile, in line with findings from previous studies, a recent US study funded by the National Institutes of Health has indicated that raising taxes on e-cigarettes in an attempt to curb vaping may be counterproductive, as it just leads people to sticking or reverting back to traditional (and more harmful) cigarettes.

Titled, “The Effects of E-Cigarette Taxes on E-Cigarette Prices and Tobacco Product Sales: Evidence from Retail Panel Data,” the study aimed to examine the effect of e-cigarette taxes enacted in eight US states. Using data from 35,000 national retailers between 2011 and 2017, the researchers found that for every 10% increase in e-cigarette prices, e-cigarette sales dropped by 26%. However, the same 10% increase in e-cigarette prices caused an 11% increase in traditional cigarette sales.

“We estimate that for every e-cigarette pod no longer purchased as a result of an e-cigarette tax, 6.2 extra packs of cigarettes are purchased instead,” said concerned study co-author and economist from Georgia State University Michael Pesko.

Read Further: Medical Xpress

Hungary: Reactions to Steep Increases in Tobacco Taxes


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