The impact of cigarette prices on smoking participation and tobacco expenditure in Vietnam

Vietnam is one of countries with the highest number of smokers in the world and the high smoking prevalence among men in the region. Although the real cigarette prices increased by around 4% during the 2010-2015 period, the prevalence of daily cigarette smoking among men decreased slightly from 31.3% to 30.7% during this period. This raises the question of whether cigarette consumption is sensitive to price. In this study, we estimated the effect of cigarette prices on smoking participation and tobacco expenditure in Vietnam. We found that a one-percent increase in the real cigarette price reduced the probability of cigarette smoking among males by 0.08 percentage points (95% CI from -0.06 to -0.10), equivalent to the price elasticity of the smoking prevalence at -0.26 (95% CI from -0.16% to -0.33%). Using this estimate, we predict that if the cigarette price is increased by 10%, the daily cigarette smoking prevalence among men would decrease from 30.7% to 29.9% and the number of male smokers would decline by around 270 thousand. Higher cigarette prices also reduced per capita tobacco expenditure of households. A one-percent increase in the cigarette price decreased per capita expenditure on tobacco consumption expenditure of households by 0.43 percent (the 95% CI from -0.029 to 0.822). This finding suggests that raising tobacco taxes and prices can be an effective measure to reduce tobacco use.