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How increasing tobacco prices affects the decision to start and quit smoking: evidence from Argentina

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  • Martin Gonzalez-Rozada
  • Giselle Montamat

Abstract

We study empirically the role of cigarettes’ prices on smoking onset and quitting in Argentina, using a continuous-time split population model. The findings in this paper suggest that increasing cigarettes’ prices, using taxes, has a larger effect on the starting age of smoking than on the quitting age. In particular, at the mean starting age of 15 years an increase of 20% in real cigarettes’ prices is expected to delay smoking onset by 3 years. On the other hand, the same policy is less effective to reduce the duration of the habit because, while negative, the relationship between the duration of the smoking habit and the real price of cigarettes is weak. A policy recommendation that emerges from this evidence is that for people with a developed addiction a combination of an increment in taxes and other public health policies, like cessation therapies, could be implemented to accelerate the time of quitting smoking.

Suggested Citation

  • Martin Gonzalez-Rozada & Giselle Montamat, 2015. "How increasing tobacco prices affects the decision to start and quit smoking: evidence from Argentina," Department of Economics Working Papers wp201501, Universidad Torcuato Di Tella.
    • Handle: RePEc:udt:wpecon:wp201501
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    References listed on IDEAS

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    1. G. Guindon, 2014. "The impact of tobacco prices on smoking onset in Vietnam: duration analyses of retrospective data," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(1), pages 19-39, January.
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    4. William N. Evans & Matthew C. Farrelly, 1998. "The Compensating Behavior of Smokers: Taxes, Tar, and Nicotine," RAND Journal of Economics, The RAND Corporation, vol. 29(3), pages 578-595, Autumn.
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    More about this item

    Keywords

    smoking onset; quitting smoking; split population model; cigarettes’ prices and taxes; survival analysis;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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