Effects of Experimental Income on Demand for Potentially Real Cigarettes

Abstract

IntroductionEconomic demand analyses quantify the relationship between the cost of a commodity and population-level measures of consumption of that commodity. In the case of cigarettes, these analyses largely depend on abrupt fluctuations in price caused by the assessment of new taxes on cigarettes. Studies of this type have found that cigarette consumption is related to price, and that the sensitivity to price, or demand elasticity, is greatest among lower income people.1-3 Behavioral economic demand analyses are analogous to these population-level analyses, but can be used to understand the level of motivation to consume a product on either an individual or small group level, including cigarettes. 4,5 This level of analysis allows for experimental manipulations to be made on variables of interest. By quantifying how consumption decreases as costs to obtain and consume a product increase, important indices of demand are obtained. These indices can be grouped into two main measures of consumption, demand intensity and demand elasticity, which are associated with use level and dependence severity. 5-8Demand intensity is the amount of the commodity consumed when available at a very low cost approaching free, and demand elasticity quantifies the degree to which the individual is willing to increase monetary or effort-based expenditures to maintain the AbstractIntroduction: Cigarette demand, or the change in cigarette consumption as a function of price, is a measure of reinforcement that is associated with level of tobacco dependence and other clinically relevant measures, but the effects of experimentally controlled income on real-world cigarette consumption have not been examined. Methods:In this study, income available for cigarette purchases was manipulated to assess the effect on cigarette demand. Tobacco-dependent cigarette smokers (n = 15) who smoked 10-40 cigarettes per day completed a series of cigarette purchasing tasks under a variety of income conditions meant to mimic different weekly cigarette budgets: $280, approximately $127, $70, or approximately $32 per week. Prices of $0.12, $0.25, $0.50, and $1.00 per cigarette were assessed in each income condition. Participants were instructed to purchase as many cigarettes as they would like for the next week and to only consume cigarettes purchased in the context of the study. One price in 1 income condition was randomly chosen to be "real, " and the cigarettes and the excess money in the budget for that condition were given to the participant. Results: Results indicate that demand elasticity was negatively correlated with income. Demand intensity (consumption at low prices) was unrelated to income condition and remained high across incomes. Conclusions:These results indicate that the amount of income that is available for cigarette purchases has a large effect on cigarette consumption, but only at high prices.

The Experimental Tobacco Marketplace I: Substitutability as a Function of the Price of Conventional Cigarettes

“…Thus, in both experiments when the prices of conventional cigarettes increased resulting in decreased consumption, participants compensated with nonstudy combustible tobacco products (mostly cigarettes), consistent with a previous report, 14 and (3) the presence or absence of cigarillos in the ETM is related to purchasing of nonstudy provided cigarettes. Significant differences between the slopes indicate that when cigarillos were available in the ETM, participants were less likely to break study protocol by purchasing outside products, likely a result of high levels of substitution with cigarillos in Experiment 1.…”

“…[21][22][23] More recently, participants purchased conventional cigarettes at various prices in the laboratory for use in their daily life permitting interactions with real world circumstances. 14,20 The ETM is the next step in the evolution of this methodology to study reinforcer demand and substitution in an ever more naturalistic context. Where the evolution of this method may lead is beyond the scope of this article, but may be important for the future study of the behavioral economics of tobacco product consumption.…”

The Experimental Tobacco Marketplace II: Substitutability and sex effects in dual electronic cigarette and conventional cigarette users

“…This suggests that simply asking participants to comply with the study rules is not sufficient for compliance and may be associated with particular actualized conditions. Only in an actual closed economy situation, can the opportunity for outside consumption be avoided (Koffarnus et al, 2015). Finally, these data may be biased toward e-cigarette substitution given the recent prior e-cigarette use required for inclusion in the study.…”

Behavioral Economics of Cigarette Purchase Tasks: Within-Subject Comparison of Real, Potentially Real, and Hypothetical Cigarettes

“…A previous study had shown that subjects given this study income expressed purchasing behavior that was comparable to self-reported nicotine consumption. 26 The five purchasing sessions were split into real (four sessions) and potentially real (one session) conditions, the order of these two conditions was counterbalanced across subjects. During each real session, the participants purchased and receive cigarettes at a single price, either $0.12, $0.25, $0.50, or $1.00 (presented in a randomized order).…”