Price-Responsiveness of Cigarette Smoking Behaviors across Income Groups in the United States

To compare price-responsiveness of smoking participation and intensity across U.S. income groups. We pooled the 2015-2016, 2018-2019, and 2022 Tobacco Use Supplement to the Current Population Survey data (n = 337 974 aged 18+), classifying respondents into poor, low-income, middle-income, and high-income groups (<100%, 100-199%, 200-399%, and ≥ 400% of the Federal Poverty Level (FPL), respectively). Using a two-part econometric model of cigarette demand, we estimated the price elasticities of smoking participation and intensity for each income group. State-level cigarette price data came from the Tax Burden on Tobacco Report. Additional covariates included sociodemographic characteristics, secular variation, and state-level smoke-free air law coverage, tobacco control program funding, and unemployment rate. Price elasticity of smoking participation was significant for the poor (-0.32), low-income (-0.27), and middle-income (-0.24) groups but not for the high-income group. Price elasticity of smoking intensity was statistically significant for middle-income (-0.33) and high-income (-0.42) smokers but not for poor and middle-income smokers. Total price elasticity of cigarette demand was statistically significant for all groups; total elasticity estimates were highest among the middle-income group (-0.56), followed by the low-income (-0.48), and were lowest among the poorest (-0.40) and highest income (-0.40) groups. Our results indicate that the lower-income (<200% FPL) groups were significantly more price-responsive than the high-income group in reducing smoking participation but smokers in these lower-income groups were not price-responsive in reducing smoking intensity. Earmarking cigarette taxation revenues for cessation assistance to help smokers in the lower-income groups who could not quit smoking is warranted. This study adds to the rich but inconclusive literature, comparing the price-responsiveness of smoking behaviors across U.S. income groups. Our results also indicate that the lower-income (<200% FPL) groups were significantly more price-responsive than the high-income group in quitting cigarette smoking but smokers in the lower-income groups were not price-responsive in reducing smoking intensity. Earmarking cigarette taxation revenues for cessation assistance to help smokers in the lower-income groups who could not quit smoking is warranted.