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Is cigarette smoking in poorer nations highly sensitive to price?: Evidence from Russia and China

Lance, Peter M ; Akin, John S ; Dow, William H ; Loh, Chung-Ping

Journal of Health Economics, 2004, Vol.23(1), pp.173-189 [Peer Reviewed Journal]

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  • Title:
    Is cigarette smoking in poorer nations highly sensitive to price?: Evidence from Russia and China
  • Author/Creator: Lance, Peter M ; Akin, John S ; Dow, William H ; Loh, Chung-Ping
  • Language: English
  • Subjects: Health ; Smoking ; Development ; Cigarette Demand ; Russia ; China ; Public Health
  • Is Part Of: Journal of Health Economics, 2004, Vol.23(1), pp.173-189
  • Description: Traditionally, cigarette smoking has been more pervasive in wealthier societies. However, in the 1970s per-capita consumption began to rise dramatically in poorer nations, while on balance it fell in richer ones. In Western nations, cigarette taxes have often been an important instrument for discouraging smoking. It is unclear whether they will prove effective in developing nations, but there is a fairly widely held belief that they should. This paper examines cigarette demand in China and Russia using longitudinal micro-level household and community surveys. Previous developing-country price elasticity estimates of around -0.75 have been larger than US estimates of about -0.4, but the former have relied primarily on aggregate data. In contrast, these micro-level price elasticity estimates in China and Russia range from 0 to -0.15. Thus, raising prices in poorer countries may not reduce smoking to the degree previously suggested.
  • Identifier: ISSN: 0167-6296 ; E-ISSN: 1879-1646 ; DOI: 10.1016/j.jhealeco.2003.09.004