Objectives: To calculate cigarette affordability for a number of countries, using different techniques and data, and to investigate trends since 1990; and to assess the appropriateness of different measures of affordability. Design: Two existing measures were specified. Relative Income Price (RIP) uses per capita GDP as the measure of income, while “minutes of labour” is based on the UBS survey of earnings. Subjects: RIP (1990-2006) is calculated for 32 high-income and 45 low- and middleincome countries. The “minutes of labour” measure is calculated for 29 high-income and 23 low- and middle-income countries. Results: In high-income countries cigarettes are significantly more affordable than in low- and middle-income countries, but have become less affordable since 1990. Among low- and middle-income countries cigarettes have become more affordable since 1990 and at an increasingly rapid rate since 2000. In 33 of 34 countries where cigarette affordability decreased since 1990, the real price increased. In 20 of 37 countries where cigarettes became more affordable, real price decreased. When measuring affordability in low- and middle-income countries, a broad income measure, like per capita GDP, is most appropriate. For high-income countries, the choice of income measure is not important. Conclusions: In international comparisons, cigarette prices should not only be viewed in money terms but also in terms of their affordability. Fast-growing countries face greater tobacco control challenges since rising incomes increase the affordability of cigarettes. The fact that cigarettes have become increasingly affordable in a majority of low- and middle-income countries is a major tobacco control failure.
Economists have consistently promoted excise tax increases as an appropriate and effective tobacco control strategy.1,2 Higher taxes increase the retail price and decrease the demand for cigarettes. Numerous studies over the past decades have shown that the demand for cigarettes is heavily influenced by changes in the price of cigarettes.3,4 By raising the excise tax, policy makers are able to increase the retail price of cigarettes, making the product less affordable.
CONCLUSION
This paper’s central message is that, despite methodological and data issues, policy makers should focus more on the affordability of cigarettes and less on the (real) price in isolation of income. A price-based policy prescription may not be sufficient to reduce the affordability of cigarettes in fast-growing countries. An affordability-based policy prescription is more general, and possibly more useful, as a tobacco control target, especially in rapidly growing countries.
