Cigarette Brand Substitution Patterns in Vietnam

This Policy Brief was written by Development and Policies Research Center (DEPOCEN) in Vietnam. The policy brief analyzes the effect that the proposed tax structure would have on cigarette brand substitution. The researchers find that smokers are more likely to substitute a domestic brand with a different domestic brand, largely because foreign brands are more expensive. When cigarette prices are increased, smokers of low-priced brands are more likely to quit than those of high-priced brands. This finding suggests that low-income individuals would benefit most from increasing the price of cigarettes. The policy brief concludes that the adding a specific excise tax on tobacco products would not negatively effect the domestic industry, while significantly benefitting low-income smokers.