A novel approach to estimating the prevalence of untaxed cigarettes in the USA: findings from the 2009 and 2010 international tobacco control surveys

Abstract

Background Increases in tobacco taxes are effective in reducing tobacco consumption, but because of the addictive nature of cigarettes, smokers often seek out less expensive sources of cigarettes. The objective of this study is to estimate the prevalence of cigarette packs that are untaxed by the state in which the participant resides in a sample of US smokers at two time points. Methods Data for this study were taken from the 2009 and 2010 waves of the International Tobacco Control United States Survey. Members of this nationally representative cohort of smokers were invited to send us an unopened pack of their usual brand of cigarettes. Results In 2009, 318 packs were received from 401 eligible participants (79%). In 2010, 366 packs were received from 491 eligible participants (75%). In total, 20% of the packs in 2009 and 21% in 2010 were classified as untaxed by the participant’s state of residence. The prevalence of untaxed cigarettes was higher in states with higher-excise taxes. Smokers who do not have a plan to quit were significantly more likely to have sent back a pack that was classified as untaxed by the participant’s state of residence. Conclusions One in five packs were untaxed with rates higher in states with higher-excise taxes. It is unclear whether these estimates differ from the actual prevalence of cigarettes that are untaxed by a smoker’s state of residence. Harmonisation of excise tax rates across all 50 US states might be one method of reducing or eliminating the incentive to avoid or evade these taxes.

Estimating cigarette tax avoidance and evasion: evidence from a national sample of littered packs

“…Results showed that about 20% of packs were not taxed by recipients' state of residence. 20 Both this study and our study show lower rates of non-compliance than in littered pack studies of Chicago (75% in summer 2007) and New York City (51% in summer 2008). 6 8 The relatively high non-compliance rates in Chicago and New York City are to be expected.…”

The prevalence of brand switching among adult smokers in the USA, 2006–2011: findings from the ITC US surveys

“…In past studies, however, we have asked respondents to send us a pack of their cigarette brand and have found a high degree of concordance (93%) between the self-reported brand used and what was sent to us by the respondent after the phone interview. 28 Third, the reported high levels of brand switching found in this study may be an anomaly of the environment at the timing of our surveys. It has been previously documented that an increase in the use of discount cigarette brands followed the $0.61 increase in the federal excise tax (FET) on cigarettes in 2009.…”

Excise Tax Differences at Oklahoma Smoke Shops

“…To further explore these results, investigators calculated price differentials at the shop level for the 14 Muscogee shops selling contraband cigarettes plus 11 non-Muscogee shops that provided the closest intertribal competition. These results, at the bottom of Table 3, show a strange diversion of the pricing for individual pack sales from carton pricing (that may reflect marketing strategy) but no coherent trend in price changes coinciding with timing of the discontinuation of contraband sales.…”

“…[12][13][14] The epidemiology of Native American smoking has also been studied. 15 Smuggling and inter-jurisdictional competition in cigarette sales has been extensively studied.…”