Ujang is also here in Canberra writing a cool paper on the economics of smoking. (I heard he has promised the manager "to café" some piece of it). So there we were chatting about the issue over coffee.
Ujang mentioned a study in U.S. that found that price policy can not effectively change smoking behavior in favor of health. That is, when the price of cigarette increases, the sales drop slightly, but the nicotine accumulation rate in the smokers' blood remain constant at the least. This finding seems to have bothered Ujang who hypothesized that in order to discourage smoking (and thus to promote healthy life), you simply need to increase the price of cigarette. But that study came up with the surprising conclusion. I think that's why Ujang decided to test his model on Indonesian family data.
But I guess what happened in that study was ... an increase in smoking efficiency as a response to the price change. That is, before the price increases, smokers tend to smoke inefficently: to smoke only half or three quarter of the cigarette and throw it right after, to smoke while talking at the same time (so as letting the wind contributes in consuming the cigarette), etc. When the price increases to some "decisive level" (that is, a level that can alter marginal buying), the smokers might reduce their buy. But they now become more efficient in smoking. They smoke until it really hit the filter, they don't allow "joint-smoking" with the wind, et cetera. As a result, the nicotine level in their blood stays constant. Or even higher.
A friend who was also in the chat, Dede, disagreed. He said that smoking style is hard to change. One might enjoy smoking only half of his cigarette (the taste might not evenly distributed across the cigarette). Another might like to see his cigarette burnt by the wind while he is composing a poem. And so forth. Well, being a chain smoker himself, Dede might be right, too.
Another friend, Aceh, had a better explanation. Because the cigarette becomes more expensive, smokers try to keep the smoke as much as possible inside ... their lung :-)
What do you think, smokers?
Update: Ujang just texted me. The measured substance in the smokers' blood was "cotinine" as a proxy of nicotine intake. My apologies.
Economics of smoking
at last, a useful article.
ReplyDeletein the land where a pack of cigarette cost 12 times more than back home, smoking management is indeed needed. so yes, i'm along with my fellow bloodbrothers (and sisters), that thou shalt savour thy cigarette to the very bit. if Dede said old habit is hard to break but with such price spike, believe me, we'd adjust.
(chain) smoker, unite!
Nothing important, just this: back in the old days whenever I smoked Ujang always asked for a cigarette from me and instead of lighting it he broke or squeezed it. I could tolerate that but now I don’t think I can. So while I still smoke a pack daily, the only thing altered by the price increase is...Ujang’s habit.
ReplyDeleteCiggy price increase is a sign of the jump of ciggy co's share price. Buy the shares and keep smoking.
ReplyDeleteAlternatively, it's a sign that the gummint needs more receipt.
Otherwise, it's just a sign of general increase in CPI.
Nothing special.
i seen ppl quit smoking over price (in the UK/US).
ReplyDeleteharder for me tho. i can't think proper without my nicotine dose. can't see why people need to bother so much about it, it's wildly exagerated.
i don't think my decision to stop (temporary) or to continue (chain) smoking is ever influenced by the price of cigarettes.
ReplyDeletei once stopped smoking for around two years, due to pregnancy and breastfeeding. Interestingly, my highest rate of cigarette consumption took place in NY, the place where they sold the $6-8 dollar per pack, i have to buy it online!!!
at the moment, i stop for ramadhan. i hate the after taste of nicotine on fasting time. it might continue after the Ied. don't hold your breath
Well, if cigs for people are like chocolate for me, the price increase will need to be pretty steep to induce a significant cut down (and therefore reduce the smoker's health risks). Meanwhile, however, even a slight decrease in the number of cigs lighted is beneficial for non-smokers. And now that you mention it, if a price increase induces more efficient smoking, that sounds like more good news for the non-smokers (i.e. less second-hand smoke since it's being absorbed by the smoker's body rather than quickly exhaled or let burnt by the wind?). In that case, even if the increase in price doesn't have the desired health effects on the smoker, perhaps the dividend's in the health benefits for the non-smoker around them.
ReplyDeleteSmoking is a habit and an addiction. Where do you put 'habit' and 'addiction 'in economics classification? I think it's pretty close to 'taste', don't you think? Economics behaviour in smoking is like the behaviour of eating, or collecting. You will go and get the thing you like at whatever price there is, unless it gets too much.
ReplyDeleteSurely, I won't buy a pack of cigarette at $50 a pack. Or I might, but probably only once every month. The cost from spending that much money is more than the pleasure slash benefits I get from smoking.
Here, Icut. It's called rational addiction. Thanks!
ReplyDeleteCould we considered the cigarette substitution?
ReplyDeleteLong time ago, I studied economic of smoking behaviour and I found that when you increase the price of cigarette, the producer try so hard to supply different type of cigarette or tobacco product with lower price (the type that government not yet regulated, for Indonesia case it's based on tar contained).
So, if the consumer used to consume the now expesive cigarette, then he/she will substitute to cheaper cigarette (since they alrady addicted) and they will consume more to satisfy the taste of expesive cigarettes. That's explain why the cigarettes substance inside the lung still increase despite of higher price of cigarettes.
That's an explanation, Embun. But of course there's limit to substitutability. The more addicted you are, the less substitutions you might want to tolerate.
ReplyDelete