Cigarette Affordability in China, 2006⁻2015: Findings from International Tobacco Control China Surveys

Exploring the value in variations of the Relative Income Price (RIP) for calculating cigarette affordability: An illustration using Malaysia

The relationships between cigarette affordability, consumer income levels and distribution, and tax increases are complex and underexplored. This study investigates different ways of calculating the Relative Income Price (RIP) measure of affordability using Malaysia as a case study. We calculate cigarette affordability in Malaysia between 2009-2019 using government data, and multiple RIP variants. The conventional RIP calculation relies on 2,000 sticks and GDP (henceforth standard RIP). We explore that and other variants that use annual cigarette consumption estimates and/or proportions of various financial measures of wealth in both rural and urban areas. Our findings indicate broadly consistent trends in cigarette affordability across all methods. From 2009 to 2012, there was a slight decrease in the percentage of wealth required to purchase cigarettes, followed by an increase in 2015 and 2016, and then another decline, suggesting a recent trend toward increased affordability. Using the standard RIP method, 0.9 percentage points(pp) more of per capita GDP was required between 2009 and 2016, but, by 2019 it was 0.1pp less than in 2016. However, Household Income Per Capita (HIPC) and Household Expenditure Per Capita (HEPC) provide a more nuanced perspective on cigarette affordability compared to GDP per capita, as they reveal larger shifts in affordability. The conventional 2,000 sticks method using HIPC from 2009 to 2016 indicated 0.3pp more of income was required to purchase cigarettes, but by 2019, it was 1.0pp less than in 2016. Using HIPC with actual consumption estimates, smokers required approximately 0.9pp more of average income to purchase cigarettes between 2014 and 2016, but 2.5pp less from 2016 to 2019. Actual consumption estimates offer insight into smokers' ability to offset higher purchase costs by adjusting consumption patterns without quitting. We conclude that to address issues related to cigarette affordability, the Malaysian government should consider increasing tobacco tax vis-à-vis income growth.

Potential impacts of spatial restrictions on tobacco retail availability in China: a simulation study in Shanghai

OBJECTIVES

Regulating tobacco retail availability provides promising new opportunities for effective tobacco control. This study simulates the potential impacts of introducing spatial restrictions on the availability of tobacco in Shanghai, the largest city in China.

METHODS

Twelve stakeholder-informed simulation scenarios under four types of spatial restrictions were considered: (1) capping, (2) ban of sales, (3) minimum spacing and (4) school-buffer exclusion zone. Tobacco retailer data for Shanghai (n=19 413) were used. The main outcome was per cent reduction in retail availability measured by population-weighted kernel density estimation across neighbourhoods, and impacts on social inequality in availability were estimated using the Kruskal-Wallis test and effect size estimation. All analyses were further stratified by three levels of urbanity to examine geographical disparities in overall effectiveness and equity of the simulation scenarios.

RESULTS

All simulation scenarios have the potential to reduce availability, with overall reductions ranging from 8.60% to 85.45%. Compared with the baseline, the effect size regarding the association between availability and neighbourhood deprivation quintiles suggests that the most effective scenario, '500 m minimum spacing' between retailers, increased the social inequality in availability (p<0.001). Conversely, school-buffer scenarios were both effective and equitable. Additionally, the effectiveness and the equity impact of scenarios varied by urbanity level.

CONCLUSION

Spatial restrictions offer potential new policy opportunities to reduce retail availability, but some may increase social inequality in accessing tobacco. For effective tobacco control, policymakers should consider the overall and equity impacts of spatial restrictions when developing comprehensive tobacco retail regulations.

Social Participation and Persistent Smoking Among Older Chinese With Smoking-Related Morbidity

OBJECTIVES

Chronic diseases are common in midlife and old age and smoking can pose more health and longevity challenges for older people with chronic illnesses. In China where smoking is highly prevalent, older adults are likely to continue smoking even after developing severe chronic diseases. We examined the national prevalence of persistent smoking among older adults. We also investigated the sociodemographic characteristics of persistent smoking among ever-smokers with chronic diseases and its association with social participation (of various types).

METHODS

We used data from a nationally representative sample of older adults aged 45-80 in the China Health and Retirement Longitudinal Study (2011-2018). Multinomial logistic and multilevel logistic models were fitted.

RESULTS

The national prevalence of persistent smoking was around 24% of older men and 3% of older women. Among those with a history of smoking and chronic illness, younger, nonmarried/partnered, nonretired, or less educated individuals are more likely to continue smoking. Social participation is significantly associated with persistent smoking among those with chronic diseases, but the association differs across different forms of activities. Although the most popular but sedentary activities in China (playing Mahjong, chess, or cards) are associated with an elevated risk of persistent smoking, physical social activities (community-organized dancing, fitness, and qigong) are associated with a reduced risk of persistent smoking.

DISCUSSION

Given the enormous burden of persistent smoking on individuals and society, public smoking cessation inventions should address sociocultural factors of persistent smoking and target older adults who participate in specific social activities.

Tobacco industry pricing strategies in response to excise tax policies: a systematic review

OBJECTIVE

To explore what is known about the tobacco industry's (TI) price-based responses to tobacco excise tax policies and whether these vary by country income group using a systematic review.

DATA SOURCES

Studies assessing TI pricing tactics were identified via searches of five online databases using a combination of search keywords.

STUDY SELECTION

Inclusion criteria were applied by two reviewers independently who screened all search results (titles and abstracts) for possible inclusion. They identified 37 publications that reported TI pricing tactics.

DATA EXTRACTION

Study details were tabulated, and information was extracted on the country income group, population characteristics, excise tax structure, and pricing strategies.

DATA SYNTHESIS

Of the 37 publications identified, 22 were conducted in high-income countries, while 15 covered low-income and middle-income countries (LMICs). Major pricing strategies employed were: differentially shifting taxes between products (35 studies); launching new brands/products as pathways for downtrading (six studies), product promotions and different prices for the same products for different customers (six studies); price smoothing (two studies); and changing product attributes such as length/size of cigarettes or production processes (three studies).

CONCLUSIONS

While there is limited evidence to fully ascertain industry responses to tax increases, this review suggests that the TI widely uses a multitude of sophisticated pricing strategies across different settings around the world with the intention of undermining tax policies, thereby increasing tobacco consumption and maximising their profits. There is a need for further research in this area especially in LMICs so that effective policy responses can be developed.

Decomposition and Comparative Analysis of the Prevalence of and Factors Associated With Smoking Between the Rural and Urban Elderly Population in China: A National Cross-Sectional Study

This study aimed to compare and analyse the differences in smoking prevalence, and knowledge, attitudes, and factors associated with smoking between the rural and urban elderly population in China. In total, 6,966 participants aged 60 and above were included in this study, which assessed their smoking-related knowledge, attitudes, and perceptions toward tobacco control. The Chi-square test and logistic regression model were used for statistical analysis, and the Fairlie model was used for decomposition analysis. The overall prevalence of smoking was 25.6%; the rate was much higher in men than in women (overall: OR = 26.234; urban: OR = 31.260; rural: OR = 23.889). The rate of correct responses to all questions on smoking problems was significantly higher among the urban elderly than the rural elderly. Further, 64.18% of the participants supported printing photos of the health hazards of smoking on the cover of cigarette packs, and the rural elderly were more supportive of this. Moreover, only 36.52% of the participants supported increasing taxation and retail price of cigarettes; the urban elderly showed more support for this. Rules about smoking at home also played an important role, especially for families where smoking was not allowed at home, but with exceptions to the rule; however, this factor was only meaningful in urban families (urban: OR = 0.117). Through the Fairlie decomposition analysis, gender (-1.62%), age (-2.03%), region (13.68%), knowing about e-cigarettes (5.17%), rules about smoking at home (3.95%), and smoking-related knowledge scores (42.85%) were found to be associated with rural-urban disparities. This study focused on the differences in smoking between urban and rural areas in China. Smoking among the urban elderly was significantly less prevalent compared with the rural population. Factors including education, region, and smoking-related knowledge need to be addressed to reduce the gap between urban and rural health hazards in China.

The impact of smoking on annual healthcare cost: an econometric model analysis in China, 2015

Background

Smoking exerts substantial medical burdens on society. Precise estimation of the smoking-attributable medical expenditures (SAME) helps to inform tobacco control policy makers. Based on the epidemiological approach, prior studies in China only focused on a few smoking-related diseases to estimate SAME. In contrast, this study used the econometric approach, which is capable of capturing all of the potential costs.

Methods

Three waves of panel data from the 2011–2015 national China Health and Retirement Longitudinal Study (CHARLS) were used. A total of 34,503 observations aged 45 and above were identified. Estimates from econometric models were combined to predict the smoking-attributable fraction (SAF) and medical expenditures attributable to smoking by sex, registered residency and healthcare service categories. All monetary amounts were adjusted to 2015 dollars.

Results

In 2015, the overall smoking-attributable fraction (SAF) of China was 10.97%, ranging from 5.77% for self-medication to 16.87% for inpatient visits. The smoking-attributable medical expenditure (SAME) was about $45.28 billion, accounting for 7.24% of the total health expenditure. The SAME was $226.77 per smoker aged 45 and above. The regression results suggest that being a former smoker has the greatest impact, which decreases over time after quitting however, on the value of medical expenditures.

Conclusions

Smoking-attributable medical expenditures was substantial and placed a heavy burden on Chinese society. Comprehensive tobacco control policies and regulations are still needed to promote progress toward curbing the tobacco related losses.

Price, Income, and Affordability as the Determinants of Tobacco Consumption: A Practitioner's Guide to Tobacco Taxation

INTRODUCTION

Tobacco product prices and consumers' income are the two major economic determinants of tobacco demand. The affordability of tobacco products is dependent on the price of tobacco products relative to consumer income. Increase in tobacco tax is expected to lead to higher price, lower affordability, and reduced consumption. Price elasticity and affordability elasticity are used in analyzing the effect of tobacco tax increases on tobacco consumption and public health. The availability of both parameters raises the question of which one to apply in policy discussions.

AIMS AND METHODS

Using global data on cigarette consumption, price, income, and tobacco control measures for 169 countries over 2007-2016, this study estimated the price elasticity and affordability elasticity of cigarette consumption by country income classification using country-specific fixed effects model for panel data.

RESULTS

The estimates show that the restriction of equal strength of the effects of price and income changes on tobacco consumption maintained in affordability elasticity estimation is valid for low- and middle-income countries, while it is rejected for high-income countries.

CONCLUSIONS

Affordability elasticity may prove to be a useful parameter to explain and predict the sensitivity of consumers to tobacco tax and price policy changes under conditions of robust economic growth, which are more likely to be observed in countries with initial low- or middle-income setting. It can provide a reasonable benchmark for tobacco tax and price increase necessary to effectively reduce affordability and consumption of tobacco, which can form a basis for building systematic tax and price increases into the tobacco tax policy mechanism.

IMPLICATIONS

Price elasticity measures the sensitivity of consumers to changes in real prices, holding real income constant. Affordability elasticity measures the sensitivity of consumers to price changes adjusted for inflation and income changes. Existing scientific literature on tobacco demand abounds in both price and affordability elasticity estimates, without providing a clear explanation of the theoretical and policy implications of using one parameter over the other. By estimating and comparing price and affordability elasticities for high-income and low-and-middle-income countries separately, this article offers a guide to the practitioners in tobacco taxation for evaluating the effectiveness of tax-induced price increases on tobacco consumption.

Noncommunicable Diseases Attributable To Tobacco Use In China: Macroeconomic Burden And Tobacco Control Policies

Smoking causes health problems for individuals and imposes a sizable macroeconomic burden on countries. As the world's leading tobacco producer and consumer, China is at the epicenter of this health crisis. However, no studies have examined the macroeconomic burden of all relevant noncommunicable diseases (NCDs) attributable to tobacco or secondhand smoke exposure. We assessed how tobacco-attributable NCDs affect China's productive capacity and estimated that these diseases would impose a total cost of 16.7 trillion yuan (US$2.3 trillion, in constant 2018 prices) in the period 2015-30, which corresponds to an annual tax of 0.9 percent on aggregate income. Secondhand smoke exposure accounts for 14 percent of the burden. If China raised the tax on cigarettes to 75 percent of their retail price and implemented wide-ranging tobacco-control policies, the Chinese economy could save 7.1 trillion yuan (US$1.0 trillion) for 2015-30-the equivalent of adding a 0.4 percent dividend annually.

Use of Electronic Nicotine Delivery Systems (ENDS) in China: Evidence from Citywide Representative Surveys from Five Chinese Cities in 2018

China is the largest cigarette consuming country in the world. The emergence of electronic nicotine delivery systems (ENDS) in China may have important implications for the Chinese tobacco market. Unfortunately, research on ENDS in China, while growing, is still limited. This study was designed to examine the awareness and use of ENDS among adult urban residents in China. Data from five citywide representative surveys conducted in 2017–2018 were used. Percentages of residents who had ever heard of, ever used, or used ENDS in the past 30 days among all residents and smokers were estimated, in total and by demographic characteristics. Multiple logistic regression models were used to estimate the adjusted associations between awareness and use of ENDS and individual-level demographic characteristics and socioeconomic status (SES). Overall, 51.3% had ever heard, 4.8% ever used, and 0.9% used ENDS in the past 30 days. Men, young adults, those with high levels of education, and current smokers were more likely to be aware of and use ENDS. Among smokers, 67.8% had ever heard, 17.1% ever used, and 3.9% used ENDS in the past 30 days, respectively. Young adult smokers and smokers with high levels of education were more likely to be aware of and use ENDS. Our study results on ENDS awareness and use patterns and associated factors in China provide important evidence to inform research and policies related to ENDS manufacture, marketing, and sales in China.

Cigarette Affordability and Cigarette Consumption among Adult and Elderly Chinese Smokers: Evidence from A Longitudinal Study

China is in the midst of an epidemic of non-communicable diseases (NCDs), which has increasingly accounted for a growing share of disease burden, due in part to China's ongoing rapid socioeconomic changes and population aging. Smoking, the second leading health risk factors associated with NCDs in China, disproportionately affects the old population more than their younger counterparts. Using survey data from the China Health and Retirement Longitudinal Study (CHARLS), this study evaluated the impact of changes in cigarette affordability on smoking behavior among middle-aged and elderly (age 45 and older) smokers. Self-reported cigarette price and disposable income were used to calculate cigarette affordability. Cigarette consumption was measured using the number of cigarettes smoked per day reported by the survey respondents. The correlation between cigarette affordability and cigarette consumption was estimated using generalized estimating equations adjusting for demographics, socioeconomic status, geolocations, and cigarette price tiers, as well as year fixed effects. The estimated overall conditional cigarette affordability elasticity of demand was -0.165, implying a 10% decrease in cigarette affordability would result in a reduction in cigarette consumption by 1.65%. The cigarette affordability responsiveness differs by demographics, socioeconomic status, geolocations, and cigarette price tiers. This study provides evidence that tax/price policies that reduce cigarette affordability could lead to a decrease in cigarette consumption among middle-aged and elderly smokers in China. Smoke-free laws, as well as minimum price regulations, may be needed to compliment excise tax policy to target specific smoking subgroups whose cigarette consumption is less sensitive to changes in cigarette affordability.

State-Level Affordability of Factory-Made Cigarettes among Current US Smokers: Findings from the ITC US Survey, 2003-2015

Cigarette affordability measures the price smokers pay for cigarettes in relation to their incomes. Affordability can be measured using the relative income price of cigarettes (RIP), or the price smokers pay to purchase 100 packs of 20 cigarettes divided by their per capita household income. Using longitudinal data from 7046 smokers participating in the International Tobacco Control (ITC) US Survey, the purpose of this study was to test whether affordability significantly changed following the US federal tax increase implemented on 1 April 2009. This study also estimated temporal trends in affordability from 2003-2015 at state and national levels using small area estimation methods and segmented linear mixed effects regression models. RIP increased slightly during 2003-2008. This was followed by a 30% increase during 2008-2010, indicating cigarettes were less affordable after the federal tax increase. RIP continued to increase during 2010-2013 but decreased during 2013-2015, suggesting cigarettes have recently become more affordable for US smokers. State-level trends in RIP were consistent with overall national trends. Controlling for other factors, a $1 increase in the state excise tax was significantly associated with a 9% increase in RIP, indicating state taxes reduced affordability. Tax-induced price increases must keep pace with underlying economic conditions to ensure cigarettes do not become more affordable over time.