The Impact of Cigarette Price Increases on the Prevalence of Daily Smoking and Initiation in Mexico

This Report was written by Martin González-Rozada and Fiona Franco-Churruarin. The report examines the determinants of daily smoking prevalence and smoking initiation in Mexico. The authors estimate that the daily smoking prevalence elasticity is -0.40, which suggests that a 10% increase in the price of cigarettes would reduce daily smoking prevalence by 4%. Youth, the poor, and women are more responsive to price, so they would reap the most benefits from such a policy. This price increase would also delay smoking initiation, on average, by 16 months from the mean starting age of 18. Similarly, youth, the poor, and women experience longer delays compared to other groups. The report concludes that increasing the price of cigarettes through excise tax policies is a favorable and progressive policy in Mexico.

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A Policy Brief based on the report can be found here.