Quantity, quality, and regional price variation of cigarettes: Demand analysis based on a household survey in China

Chen, Yuyu; Xing, Weibo

doi:10.1016/j.chieco.2011.01.004

Cited by 11 publications

(20 citation statements)

References 17 publications

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“…Studies suggest that if we try to increase the total tax burden on cigarettes in China to meet with the World Bank yardstick of two thirds of the retail price level, the government should raise the specific excise tax to approximately 4 RMB per pack. However, a more feasible approach would be to raise the specific excise tax to 1 RMB per pack from the current level of less than 0.06 RMB per pack and then gradually increase it to 4 RMB per pack, in order to mitigate adverse effects on the cigarette industry (Sunley, ; Hu et al ., ; Chen and Xing, ). Therefore, in this subsection, we simulate a cigarette tax increase by 1, 2, 3, and 4 RMB per pack, respectively, and discuss their impacts, based on the assumption that the CNTC directly sets the retail prices of cigarettes at levels as directed by the government.…”

Section: Resultsmentioning

confidence: 99%

“…In panel I of Table , we find an average own‐price elasticity at the brand level of –0.807, which measures the percentage change in demand for a particular cigarette brand if its price increases by 1% but prices of other brands remain unchanged. This is relatively high compared to previous estimates of price elasticities that assume cigarettes to be homogeneous (e.g., Hu and Mao, ; Lance et al ., ; Bishop et al ., ; Chen and Xing, ), due to consumers’ ability to substitute across brands.…”

Section: Resultsmentioning

confidence: 99%

“…A recent study by Chen and Xing (), based on household survey data covering eight provinces in northern China, employs the Deaton method (Deaton, ) to address endogenous quality changes when unit value (i.e., expenditure divided by quantity) is used to measure cigarette price. They find an overall price elasticity of –0.82 in the two‐part model but ranges from –0.35 to –0.70 in the Deaton model.…”

Section: Introductionmentioning

confidence: 99%

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How Do Smokers Respond to Cigarette Taxes? Evidence from China's Cigarette Industry

Rizzo

Sun

et al. 2014

Health Econ.

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This paper examines how Chinese smokers respond to tax-driven cigarette price increases by estimating a discrete choice model of demand for differentiated products, using annual nationwide brand-level cigarette sales data in China from 2005 to 2010. We allow for substitution between different cigarette brands and also incorporate key features of rational addiction theory into the model. Results show that the average own-price elasticity of demand for cigarettes at the brand level is -0.807, and the overall price elasticity of cigarettes at the market level is -0.488 in China. We find tax-induced substitution toward low-price cigarettes as well as high-tar cigarettes and that tax hikes encourage within-class substitution more than across-class substitution. These results have important policy implications for the potential effects of cigarette taxation. Copyright © 2014 John Wiley & Sons, Ltd.

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Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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How Do Smokers Respond to Cigarette Taxes? Evidence from China's Cigarette Industry

Rizzo

Sun

et al. 2014

Health Econ.

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“…As such, the total impact of cigarette price increases in China could be at least twice as large as what our estimates suggest. Additionally, several recent studies show that large cigarette price spreads across brands in China were associated with brand switching behaviour, and that increasing cigarette price may also lead to trading down among smokers for low quality and high-tar cigarettes 11 19–21. Our estimates did not take into account the impact of brand switching and trading down, absence of such behaviours, our estimates would become larger.…”

Section: Conclusion and Discussionmentioning

confidence: 99%

Differential responsiveness to cigarette price by education and income among adult urban Chinese smokers: findings from the ITC China Survey

et al. 2015

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Background There are few studies that examine the impact of tobacco tax and price policies in China. In addition, very little is known about the differential responses to tax and price increases based on socioeconomic status in China. Objective The goal of this study is to estimate the conditional cigarette consumption price elasticity among adult urban smokers in China using individual level longitudinal survey data. We also examine the differential responses to cigarette price increases among groups with different income and/or educational levels. Methods Multivariate analyses using the general estimating equations (GEE) method were conducted to estimate the conditional cigarette demand price elasticity using data from the International Tobacco Control (ITC) China Survey, a longitudinal survey of adult smokers in seven cities in China. The first three waves of the ITC China Survey data were used in this analysis. Analyses based on subsample by education and income were conducted. Findings Our results show that overall conditional cigarette demand price elasticity ranges from −0.12 to −0.14, implying a 10% increase in cigarette price would result in a reduction in cigarette consumption among adult urban Chinese smokers by 1.2% to 1.4%. No differential responses to cigarette price increase were found across education levels. The price elasticity estimates do not differ between high income smokers and medium income smokers. However, cigarette consumption among low income smokers did not seem to decrease after a price increase, at least among those who continued to smoke. Conclusion Relative to many other low- and middle-income countries, cigarette consumption among Chinese adult smokers is not very sensitive to changes in cigarette prices. The total impact of cigarette price increase would be larger if its impact on smoking initiation and cessation, as well as the price-reducing behaviors such as brand switching and trading down, were taken into account.

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“…Hasil yang serupa diperoleh Nguyen, Rosenqvist, & Pekurinen (2012) dengan elastisitas harga rokok di Eropa berkisar -0,30 hingga -0,40. Penelitian Chen & Xing (2011) dan Liu et al (2015 memperoleh angka elastisitas harga rokok tertinggi di China sebesar -0,81. Sementara itu, elastisitas harga jangka panjang permintaan rokok di Pakistan mencapai -1,17 (Mushtaq, Mushtaq, & Beebe, 2011).…”

Section: Pendahuluanunclassified

Dampak Kebijakan Kemasan Rokok Singapura Terhadap Ekspor Rokok Indonesia

Alhayat¹

2015

BILP

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AbstrakPemerintah Singapura telah melakukan beragam kebijakan pengendalian tembakau (tobacco control) untuk menekan jumlah perokok. Singapura termasuk salah satu negara di dunia yang menerapkan regulasi ketat dalam pengendalian produk tembakau. Penelitian ini bertujuan untuk memperkirakan dampak penerapan kebijakan kemasan rokok Singapura terhadap ekspor rokok Indonesia. Kebijakan tersebut diasumsikan memiliki dampak sebagaimana kebijakan pengendalian konsumsi tembakau non-harga pada umumnya meskipun kebijakan tersebut belum diimplementasikan. Metode yang digunakan berupa analisis deskriptif yang dilengkapi dengan analisis ekonometri menggunakan Two-Stage Least Squares (2SLS) dengan sampel Triwulan III-2006 hingga Triwulan IV-2014. Hasil analisis menunjukkan bahwa ekspor rokok Indonesia lebih dipengaruhi oleh re-ekspor Singapura dibandingkan dengan konsumsi domestiknya. Selain itu, kebijakan pengendalian tembakau non-harga secara statistik tidak berpengaruh terhadap konsumsi rokok di Singapura. Oleh sebab itu, Indonesia tidak perlu terlalu khawatir dengan rencana kebijakan kemasan rokok yang akan diterapkan. Pemerintah Indonesia harus aktif melakukan negosiasi apabila Singapura benar-benar menerapkan kebijakan kemasan rokok dalam rangka mendapatkan kompensasi perdagangan atas kebijakan tersebut. III-2006 to IV-2014 Kata Kunci: Kebijakan Kemasan, Permintaan Ekspor, Konsumsi Rokok, 2SLS Abstract The government of Singapore has implemented various tobacco control policies to reduce the number of smoker. Singapore is one of the countries in the world that implemented a tight regulation to control tobacco products. This study aims to estimate the potential impacts of Singapore's cigarette plain packaging policy on the Indonesian cigarettes exports. As this policy is not yet implemented, it is assumed that the policy will have the same impacts as the common tobacco control policy, especially for the non-price policy. The study used descriptive analysis supported by econometrics analysis using Two-Stage Least Squares method (2SLS) using quarterly data from

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Quantity, quality, and regional price variation of cigarettes: Demand analysis based on a household survey in China

Cited by 11 publications

References 17 publications

How Do Smokers Respond to Cigarette Taxes? Evidence from China's Cigarette Industry

How Do Smokers Respond to Cigarette Taxes? Evidence from China's Cigarette Industry

Differential responsiveness to cigarette price by education and income among adult urban Chinese smokers: findings from the ITC China Survey

Dampak Kebijakan Kemasan Rokok Singapura Terhadap Ekspor Rokok Indonesia

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