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

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

Methods: We used a 2-part model of cigarette demand. In the first part, we estimated the impact of prices on the decision to smoke. Conditional on smoking, we then estimated the effect of price on the number of cigarettes smoked. We employed 2-way fixed effects to address country-level time-invariant heterogeneity and controlled 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 found 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.

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January 2014

Authors:
  • Silda Nikaj
  • Frank J. Chaloupka