The demand for nicotine replacement therapies (NRT) is inversely related to the price of NRT products.

Econometric studies found strong evidence that NRT prices are inversely related to the demand for NRT products. The average product-specific price elasticities of demand ranged from -1.85 to -3.85, implying that a 10% decrease in the price of NRT will increase the use of NRT products by between 18.5% and 38.5%. Consistent with economic theory, the brand-specific price elasticities of demand were smaller in absolute value than the product-specific price elasticities of demand. The estimated brand specific price elasticity of demand ranged from -1.11 to -2.38.

1. Tauras JA, Chaloupka FJ. The demand for nicotine replacement therapies. Nicotine and Tobacco Research 2003; 5: 237-243. http://www.nber.org/papers/8332
2. Tauras JA, Chaloupka FJ, Emery S. The impact of advertising on nicotine replacement therapy demand. University of Illinois at Chicago Working Paper . 2004. http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?cmd=Retrieve&db=PubMed&list_uids=15748682&dopt=Citation
3. Tauras JA, Chaloupka FJ. Nicotine patches and gum: economic substitutes or complements? University of Illinois at Chicago Working Paper. 2004.