Switch, Reduce, or Quit: How do Smokers Respond To Tobacco Tax Increases in Pakistan?

This Report was written by the Pakistan Institute of Development Economics (PIDE) in Pakistan. The report discusses the impact of tax increases on the behavior of smokers. The authors find that a 50% increase in the price of cigarettes results in almost half of the smokers surveyed quitting. In contrast, only 2.6% respond that they would switch to a different, cheaper cigarette brand. There is ample room to increase cigarette taxes, as the mean value of maximum willingness to pay (MWTP) is almost three times lower than the price of a pack of Marlboro. The affordability of cigarettes in Pakistan is facilitating smoking initiation at a younger age. Using these findings, the report makes recommendations for tax policies in Pakistan to reduce affordability and, therefore, reduce consumption.