Price elasticity of demand of non-cigarette tobacco products: a systematic review and meta-analysis

Abstract

Objective: To systematically review the price elasticity of demand of non-cigarette tobacco products.

Data sources: Medline, Embase, EconLit and the Web of Science without language or time restrictions.

Study selection: Two reviewers screened title and abstracts, then full texts, independently and in duplicate. We based eligibility criteria on study design (interventional or observational), population (individuals or communities without geographic restrictions), intervention (price change) and outcome (change in demand).

Data extraction: We abstracted data on study features, outcome measures, statistical approach, and single best own- and cross-price elasticity estimates with respect to cigarettes. We conducted a random effects meta-analysis for estimates of similar product, outcome and country income level. For other studies we reported median elasticities by product and country income level.

Data synthesis: We analysed 36 studies from 15 countries yielding 125 elasticity estimates. A 10% price increase would reduce demand by: 8.3% for cigars (95% CI 2.9 to 13.8), 6.4% for roll your owns (95% CI 4.3 to 8.4), 5.7% for bidis (95% CI 4.3 to 7.1) and 2.1% for smokeless tobacco (95% CI -0.6 to 4.8). Median price elasticities for all ten products were also negative. Results from few studies that examined cross-price elasticity suggested a positive substitution effect between cigarette and non-cigarette tobacco products.

Conclusions: There is sufficient evidence in support of the effectiveness of price increases to reduce consumption of non-cigarette tobacco products as it is for cigarettes. Positive substitutability between cigarette and non-cigarette tobacco products suggest that tax and price increases need to be simultaneous and comparable across all tobacco products.

Keywords: economics; hand-rolled/ryo tobacco; non-cigarette tobacco products; price; taxation.

Figure 1

Study flow diagram.