Higher cigarette taxes may do more harm than good!

Increasing cigarette taxes may encourage smokers to seek more dangerous products with higher nicotine content rather than help them quit smoking, researchers including one of Indian-origin have found.
A new study shows that while counter-marketing techniques often reduce total consumption of cigarettes, increasing cigarette taxes per package shifts some consumers to higher nicotine products.
Given the addictive properties of nicotine, this result increases addiction levels for some consumers.
By conducting the analysis on US data about store sales, the researchers examined populations of consumers that were exposed to different tax rates, advertising levels, and smoking prohibitions.
In addition, data from the US Census on ZIP code demographics allowed the researchers to examine the effectiveness of counter-marketing across consumers of different socio-economic levels.

"We find that the different anti-smoking techniques varied in terms of effectiveness," said Mike Lewis from Emory University in US.

"Taxes that directly increase the prices faced by consumers are the most effective technique in reducing consumption of cigarettes," Lewis said.
"Health-oriented advertising is also effective. Smoke-free air policies such as restaurant or workplace bans on smoking are the least effective," he said.
"However, while taxes are the most effective technique reducing smoking rates, we find that this tool has a significant downside," said Vishal Singh, from New York University.
"Because cigarette taxes are currently applied at the per pack level and without regard to nicotine levels, consumers may respond to increasing cigarette taxes by switching to higher nicotine products," Singh said.

"In other words, if consumers desire to minimise the cost per unit of nicotine, then increasing cigarette taxes may lead some consumers to shift to higher nicotine products," Singh said.
"This unintended consequence of cigarette taxes can have significant health consequences since higher nicotine levels will increase addiction levels," he said.
Importantly, the researchers also found that this unintended consequence was more likely to occur in poorer neighbourhoods.
A possible explanation for this disparate impact is that the lower socio-economic level of these consumers leads to a greater emphasis on minimising nicotine costs.
The study was published in the journal Marketing Science.