Cigarette tax and public health: what are the implications of financially stressed smokers for the effects of price increases on smoking prevalence?


Kristy Martire, National Drug and Alcohol Research Centre, University of New South Wales, Sydney, NSW, 2052, Australia. E-mail:


Aims  This paper models the predicted impact of tobacco price increases proposed in the United States and Australia during 2009 on smoking prevalence in 2010 while taking account of the effects of financial stress among smokers on cessation rates.

Methods  Two models of smoking prevalence were developed for each country. In model 1, prevalence rates were determined by price elasticity estimates. In model 2 price elasticity was moderated by financial stress. Each model was used to estimate smoking prevalence in 2010 in Australia and the United States.

Results  Proposed price increases resulted in a 1.89% and 7.84% decrease in smoking participation among low socio-economic status (SES) groups in the United States and Australia, respectively. Model 1 overestimated the number of individuals expected to quit in both the United States (0.13% of smokers) and Australia (0.36% of smokers) by failing to take account of the differential effects of the tax on financially stressed smokers. The proportion of low-income smokers under financial stress increased in both countries in 2010 (by 1.06% in the United States and 3.75% in Australia).

Conclusions  The inclusion of financial stress when modelling the impact of price on smoking prevalence suggests that the population health returns of increased cigarette price will diminish over time. As it is likely that the proportion of low-income smokers under financial stress will also increase in 2010, future population-based approaches to reducing smoking will need to address this factor.