Smoking in lower socioeconomic groups is more responsive to increases in price than smoking in higher economic groups.

Empirical studies demonstrate that those smokers who are less educated, have lower income, and belong to lower socioeconomic groups reduce smoking more in response to price increases than people who are more educated, have higher income levels, and are in higher socioeconomic groups. This increases the cost-effectiveness of higher cigarette taxes as a cessation method for these vulnerable groups of population.

A study from Australia found the negative association between real cigarette prices and prevalence was stronger among lower-income groups. One Australian dollar increase in cigarette price was associated with a decline of 2.6%, 0.3%, and 0.2% in the prevalence of smoking among low-, medium-, and high-income groups, respectively. Even among older adults in the US, higher taxes reduce smoking participation more among less educated and those living in low-income households. Women with low level of education are particularly responsive to media messages as well as price, in comparison with high-education women.

The finding that price responsiveness is higher among lower-income persons is supported by studies on the demand for tobacco products in low- and middle-income countries, implying that significant increases in tobacco taxes in these countries would be a very cost-effective method to reduce tobacco use. However, low-education women were particularly responsive to media messages as well as price, in comparison with high-education women.

Chaloupka FJ. Rational Addictive Behavior and Cigarette Smoking (December 1991). NBER Working Paper Series, Vol. w3268, pp. -, 1991.

Centers for Disease Control and Prevention. Response to increases in cigarette prices by race/ethnicity, income, and age groups – United States, 1976-1993. MMWR Morb Mortal Wkly Rep. 1994; 43: 469-472.

Townsend JL, Roderick P, Cooper J. Cigarette smoking by socio-economic group, sex, and age: effects of price, income, and health publicity. BMJ. 1994; 309: 923-926.

Chaloupka FJ, Hu T-W, Warner KE, Jacobs R, Yurekli A. The taxation of tobacco products. In Jha P, Chaloupka FJ, eds. Tobacco control in developing countries, 2000: 237-272.

Levy DT, Mumford EA, Compton C. Tobacco control policies and smoking in a population of low education women, 1992-2002. J Epidemiol Community Health. 2006; 60(Suppl 2): 20-26.

Siahpush M, Wakefield MA, Spittal MJ, Durkin SJ, Scollo MM. Taxation reduces social disparities in adult smoking prevalence. Am J Prev Med. 2009; 36(4): 285-291.

DeCicca P, McLeod L. Cigarette taxes and older adult smoking: evidence from recent large tax increases. J Health Econ. 2008; 27(4): 918-929.