Investigating cigarette affordability in 60 cities using the cigarette price-daily income ratio

Listed in:

• Affordability
• Aggregate demand for tobacco products

Abstract

Objective To investigate cigarette affordability in 60 cities. Methods Affordability of cigarettes is defined as the ratio of the price of one pack of cigarettes to daily income (cigarette price‐daily income ratio: CPDIR). Daily income data were calculated using the mean of the seven occupations with the lowest daily wage, as listed in the 2006 Union Bank of Switzerland survey; cigarette prices in 2006 were sourced from the Economist Intelligence Unit. Results Cigarette affordability in most of the surveyed cities remains high. There is a tendency for cities with high income economies to have a high level of cigarette affordability. Most of the cities in Western Europe and South and North America have high cigarette affordability, whereas 66.7% of their counterparts in Eastern Europe have medium cigarette affordability. In Asia, all cities with high cigarette affordability belong to the group of upper middle to high income economies, except for the Philippines. In Africa, Johannesburg and Nairobi have high and medium levels of cigarette affordability, respectively. Conclusion Cigarette affordability for most of the sampled cities, especially those in high income economies, is high. There is room for increasing cigarette prices via tax increases. There is a risk that the increase in cigarette prices in newly emerging economies lags behind the high speed of economic growth being experiencing. Tax increases should be given high priority.