Price and Income Elasticities of Cigarette Smoking Demand in Bangladesh: Evidence from Urban Adolescents and Young Adults

Article


Ahmed, Moin Uddin, Pulok, Mohammad Habibullah, Hashmi, Rubayyat, Hajizadeh, Mohammad and Nargis, Nigar. 2022. "Price and Income Elasticities of Cigarette Smoking Demand in Bangladesh: Evidence from Urban Adolescents and Young Adults ." Nicotine and Tobacco Research. 24 (6), pp. 826-833. https://doi.org/10.1093/ntr/ntab270
Article Title

Price and Income Elasticities of Cigarette Smoking Demand in Bangladesh: Evidence from Urban Adolescents and Young Adults

ERA Journal ID13722
Article CategoryArticle
AuthorsAhmed, Moin Uddin, Pulok, Mohammad Habibullah, Hashmi, Rubayyat, Hajizadeh, Mohammad and Nargis, Nigar
Journal TitleNicotine and Tobacco Research
Journal Citation24 (6), pp. 826-833
Number of Pages8
Year2022
PublisherOxford University Press
Place of PublicationUnited Kingdom
ISSN1462-2203
1469-994X
Digital Object Identifier (DOI)https://doi.org/10.1093/ntr/ntab270
Web Address (URL)https://academic.oup.com/ntr/article-abstract/24/6/826/6485424
Abstract

Introduction: Understanding the elasticities of cigarette smoking demand among the youth could help improve the effectiveness of tobacco control interventions. The objective of this study is to measure the price and income elasticities of cigarette smoking demand among urban Bangladeshi male adolescents and young adults aged 10-24 years.

Method: Using data from a cross-sectional survey conducted in seven urban districts of Bangladesh, we applied probit and ordinary least square (OLS) models to examine the effect of price and income on smoking participation (decision to smoke) and intensity (number of cigarettes smoked).

Results: Our results showed that price was not significantly associated with the decision to smoke, while income was a significant determinant of smoking participation. Both price and income determined the smoking intensity. The positive income elasticity (0.39) indicated that participants with greater access to money were more likely to participate in cigarette smoking and smoked more cigarettes. Negative price elasticity (-0.62) implied that increasing prices could lead to a reduction in smoking intensity among adolescents and young adults in urban Bangladesh.

Conclusion: The inelastic price demand for cigarette smoking suggests that there is scope for increasing tax on cigarettes without compromising the tax revenue.

Implications: This is the first study to investigate price and income elasticities among urban adolescents and young adults in Bangladesh. The study found no evidence that increasing the price of cigarettes discourages smoking participation but did show that increasing the price reduces the intensity of smoking among existing smokers. The results also suggest that economic measures such as taxation that increase the price of cigarettes could be a useful policy tool to limit smoking intensity without compromising government tax revenue.

Keywordssmoking; adolescent; bangladesh; elasticity; income; taxes; young adult; cigarettes
ANZSRC Field of Research 20203801. Applied economics
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PubMed ID34962282
Byline AffiliationsUniversity of Dhaka, Bangladesh
Western Sydney University
Nova Scotia Health Authority, Canada
Dalhousie University, Canada
Queensland University of Technology
American Cancer Society, United States
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