Affordability of Tobacco Products: The Case of Cigarettes

This White Paper was written by Evan Blecher, PhD. The White Paper explains the concept of affordability of cigarettes as well as how increasing excise taxes on cigarettes can make them less affordable and consequently, reduce tobacco use over time. The White Paper notes that cigarettes have become less affordable in high-income countries over time and generally more affordable in low- and middle-income countries (LMICs); though in recent years progress has been made in reducing cigarette affordability in LMICs. The White Paper recommends that governments increase excise taxes on cigarettes so that prices rise faster than income and inflation. The White Paper provides examples where government tax policies have been successful (and not so successful) at reducing the affordability of cigarettes.