Objective
To examine the features of markets for loose cigarettes in several low-income and middle-income countries and their effects on tobacco control policies, particularly taxation.
Design
An analysis of survey data targeting people who smoke in two African, one Southeast Asian and two South Asian countries and retailers across 16 African countries to study loose cigarette markets and examine how prices in these markets move relative to the prices for cigarette packs.
Results
Markets for loose cigarettes are large, and their consumer base tends to differ from the wider population of people who smoke. Loose cigarette prices are on average higher than those of cigarettes bought in packs, and they respond differently to tax increases, at least partially due to a denomination effect.
Conclusions
The features of the loose cigarette markets present a challenge for tobacco control policy, especially tobacco tax policy. One way to overcome this challenge is to aim for large, rather than incremental, tax increases.
Max Gallien is a Research Fellow at the ICTD. His research specialises in the politics of informal and illegal economies, the political economy of the Middle East and North Africa and development politics. He completed his PhD at the London School of Economics. Max co-leads the informality and taxation programme with Vanessa, as well as the ICTD’s capacity building programme.
Dr Giovanni Occhiali is a Development Economist based at the Institute of Development Studies, where he works on a number of projects related to Tax Administration and Compliance, Tax and Governance and co-leads ICTD’s capacity building programme together with Dr Max Gallien. His research focuses on Sub-Saharan Africa, and outside of the field of taxation his main interests are energy economics and industrial policies. He holds a PhD from the University of Birmingham and prior to joining ICTD, he was a Researcher at the Fondazione Eni Enrico Mattei and an Overseas Development Institute Fellow at the National Revenue Authority of Sierra Leone.
Hana is the Principle Research Officer for the Economics of Tobacco Control project at the University of Cape Town. She received her Ph.D. in Economics from the University of Illinois at Chicago. She has over seventeen years' experience in conducting research on the economics of tobacco control and in management of research projects in low- and middle-income countries. Her current research projects focus on the economic impact of tobacco control interventions in Africa, South East Asia, and in the European Union. She is also interested in the economic impact of risk factors associated with non-communicable diseases such as obesity, lack of physical activity, and alcohol consumption.
