Tobacco Use: Interventions to Increase the Unit Price for Tobacco Products
Findings and Recommendations
The Community Preventive Services Task Force (CPSTF) recommends interventions that increase the unit price of tobacco products based on strong evidence of effectiveness in reducing tobacco use. Evidence is considered strong based on findings from studies demonstrating that increasing the price of tobacco products:
- Reduces the total amount of tobacco consumed
- Reduces the prevalence of tobacco use
- Increases the number of tobacco users who quit
- Reduces initiation of tobacco use among young people
- Reduces tobacco-related morbidity and mortality
Public health effects are proportional to the size of the price increase and the scale of implementation. Based on results of the review on which this recommendation is based, an intervention that increases the unit price for tobacco products by 20% would reduce overall consumption of tobacco products by 10.4%, prevalence of adult tobacco use by 3.6%, and initiation of tobacco use by young people by 8.6%. Evidence also indicates these interventions are effective in reducing tobacco-related disparities among income groups and may reduce disparities by race and ethnicity. Economic evidence shows that raising the unit price of tobacco products substantially reduces healthcare costs and in addition can reduce productivity losses.
The full CPSTF Finding and Rationale Statement and supporting documents for Tobacco Use: Interventions to Increase the Unit Price for Tobacco Products are available in The Community Guide Collection on CDC Stacks.
Intervention
Interventions to increase the unit price for tobacco products include public policies at the federal, state, or local level that increase the purchase price per unit of sale. The most common policy approach is legislation to increase the excise tax on tobacco products, though legislative actions and regulatory decisions may also be used to levy fees on tobacco products at the point of sale. Other policies that might influence tobacco product prices were not considered in this review.
About The Systematic Review
The CPSTF finding is based on evidence from 116 studies, including 103 studies identified in two systematic reviews (IARC 2011, search period: 1982-February 2010; Wilson et al. 2012, search period: 1998-January 2012) combined with more recent evidence (13 studies, search period: 2009-July 2012). The systematic review was conducted on behalf of the CPSTF by a team of specialists in systematic review methods, and in research, practice and policy related to tobacco use and secondhand smoke exposure. The finding updates and replaces two previous CPSTF findings on increasing the unit price of tobacco to increase cessation and reduce initiation.
Study Characteristics
Of the 116 included studies, 80 were conducted in the United States, and the remaining 36 evaluated price responsiveness of populations in other high-income countries.
Summary of Results
Fifty-four of the included studies provided 90 measurements in the form of price elasticity. Effectiveness of the tobacco price interventions are captured by price elasticity estimates, which measure the change in quantity demanded corresponding to a 1% increase in price. For example, a price elasticity of demand of -0.25 means that a 20% increase in tobacco unit price would be expected to reduce tobacco demand by 5.0%.
- Total Demand (changes in use and consumption of tobacco products): A 20% increase in tobacco unit price would be associated with:
- 7.4% median reduction in demand among adults (16 studies, median price elasticity estimate: -0.37; Interquartile Interval [IQI]: -0.47 to 0.29)
- 14.8% median reduction in demand among young people (13 studies, median elasticity of -0.74; IQI: -1.13 to -0.57)
- Prevalence of Tobacco Use: A 20% increase in tobacco unit price would be associated with:
- 3.6% median reduction in the proportion of adults who use tobacco (26 studies, median elasticity of -0.18; IQI:-0.31 to -0.11)
- 7.2% median reduction in the proportion of young adults who use tobacco (22 studies, median elasticity of -0.36; IQI: -0.73 to -0.24)
- Cessation of Tobacco Use: A 20% increase in tobacco unit price would be associated with:
- 6.5% increase in cessation among adults (1 study, elasticity=0.375)
- 18.6% median increase in cessation among young people (5 studies, median elasticity of 0.93; IQI: 0.37 to 1.00)
- Initiation of Tobacco Use: A 20% increase in tobacco unit price would be associated with:
- 8.6% median reduction in initiation among young people (7 studies, median elasticity of -0.43; IQI: -0.90 to -0.00)
Sixty-two of the included studies provided other measurements of change regarding tobacco use and health outcomes.
- Thirty-nine studies found generally favorable effects of a change in unit price: Reduced total demand for tobacco products among adults and young people (6 of 7 studies); reduced smoking prevalence among adults and young people (8 of 11 studies); increased smoking cessation among adults and young people (10 of 11 studies); reduced smoking initiation among young people (6 of 10 studies)
- Reductions in mortality rates from respiratory cancer and cardiovascular disease were seen in three studies that evaluated the effect of the intervention by modeling relationships with population-based data
- Thirteen studies generated elasticity estimates based on the excise tax, not the overall change in price.
- Favorable effects were seen on total demand, prevalence, cessation, or initiation of tobacco use among adults and young people in nine studies; the remaining four studies showed mixed or no effects.
- Fifteen of the included studies examined intervention effects on tobacco use by income and race/ethnicity.
- Greater reductions in both total demand and prevalence of tobacco use were found among low-income tobacco users when compared with higher-income users (10 studies)
- Studies that controlled for income differences showed price elasticity estimates for total demand and prevalence were greatest for Hispanics, followed by African-Americans, and white tobacco users (5 studies)
Summary of Economic Evidence
Eight studies were included in the review. Four studies were conducted within a U.S. context, three were set within a European environment, and one considered all high-income countries as a group. All studies used simulation to estimate changes in healthcare and productivity costs. Monetary values are reported in 2011 U.S. dollars.
Interventions that increase the unit price of tobacco products generate substantial healthcare cost savings and can also generate additional savings in the form of productivity losses averted.
- Estimated healthcare costs savings from a 20% price increase for tobacco products ranged from -$0.14 to $90.02 per person per year (7 studies)
- Four studies conducted in the U.S. found mean annual per capita healthcare (or healthcare and productivity) savings of $73.00
- Price increases were also associated with averted productivity losses (3 studies)
Applicability
- Findings of the review should be broadly applicable to U.S. jurisdictions, populations, and intervention options
- In general, study samples were population-based, representative, and balanced for age (young people and adults) and sex
- A small number of studies targeted populations affected by health disparities which may be sensitive to changes in price, for example racial or ethnic minorities, or low income populations
Evidence Gaps
Many studies from the updated search period evaluated the impact of specific intervention characteristics, but several questions remain for future research.
Effectiveness:
- What are the effects of these interventions on other tobacco products besides cigarettes?
- What are the effects of differential price, tax, and fee environments currently in place on the use of different tobacco products?
- What are the effects of non-tax and non-fee price influencing interventions such as minimum price laws, coupon and voucher restrictions, and restrictions on price discount programs on tobacco use?
- What are the synergistic effects between tobacco price interventions and revenue dedicated to support comprehensive tobacco prevention and control programs?
Applicability:
- Are there additional data that evaluate the differences in price responsiveness by race and ethnicity?
Barriers:
- What are the characteristics of local policies that successfully establish tobacco excise taxes and/or fees?
Economic:
- What are the costs associated with different tobacco policy (price) interventions?
- What are the effects of tobacco product price increases on productivity?
- What are the (estimated) economic effects of tobacco product price increases once differences in socio-economic status are accounted for?
Implementation Considerations and Resources
- Successful legislative efforts have typically required coalitions organized around both public health and revenue objectives
- Enforcement may be required in certain jurisdictions to address tax evasion activities such as smuggling and illicit distribution and sale of untaxed tobacco products
- Political deliberations on price interventions typically result in media coverage, giving public health organizations and healthcare providers a chance to convey basic health information about tobacco use and the benefits of quitting
- Policy adoption should be followed by expansion and promotion of cessation services to help tobacco users interested in quitting
- Revenue-sharing agreements with tribes to include state or local excise taxes and fees on tobacco products sold in tribal outlets can protect the public health benefits of state and local price policies
- Policies that treat tobacco products differently may increase substitution of tobacco products (for example tobacco users switching from cigarettes to lower-priced cigars or roll-your-own tobacco)
A number of barriers to implementation were identified in the review:
- City and local policies may be blocked by state preemption legislation
- Although it should be expected that some will oppose excise tax or fee increases, surveys typically show widespread public support for excise taxes
- Policies that propose to dedicate part of the revenue to tobacco prevention and control, especially services and support for tobacco users interested in quitting, may address concerns about revenue and be more acceptable
Policies may be implemented at national, state, or local levels:
- National legislation would reduce cross-border issues and, depending on the stipulations, tobacco product substitution
- Most policy activity in the U.S. has occurred at the state level
- Local policies such as regulatory, health-impact, and abatement fees allow communities to use existing government mechanisms to address local concerns (such as the clean-up costs of tobacco product litter)
Crosswalks
Healthy People 2030 includes the following objectives related to this CPSTF recommendation.