Tobacco industry price‐subsidizing promotions may overcome the downward pressure of higher prices on initiation of regular smoking

John P. Pierce, Todd P. Gilmer, Lora Lee, Elizabeth A. Gilpin, Joy de Beyer and Karen Messer

Health Economics, 2005, vol. 14, issue 10, 1061-1071

Abstract: Real cigarette prices in the US increased from the early 1980s to early 1990s. Holding all else equal, adolescent initiation of regular smoking should have declined during this period. Using national population‐based surveys (n = 336 343) conducted in the 1990s, we present trends (early 1960s to mid‐1990s) in the initiation of regular smoking among 14–17‐year‐old adolescents and 18–21‐year‐old young adults. We also present trends in consumer‐price‐index‐adjusted cigarette price and tobacco‐industry expenditures for price‐subsidizing promotions. We relate price and price‐subsidizing tobacco industry expenditures to trends in initiation in the two age groups, using autoregressive integrated moving average models (ARIMA). From the model results, we conclude that price‐subsidizing promotions may provide the tobacco industry with an effective way to segment the market. That is, they effectively offer lower prices to population subgroups that are more price‐sensitive (e.g. young smokers not yet addicted), countering the depressing effect of general price increases on smoking. Thus, we find that the relationship of cigarette price to smoking behavior is more complex than previously described. Copyright © 2005 John Wiley & Sons, Ltd.

Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1002/hec.990

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:14:y:2005:i:10:p:1061-1071

Access Statistics for this article

Health Economics is currently edited by Alan Maynard, John Hutton and Andrew Jones

More articles in Health Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().