The price elasticity of heated tobacco and cigarette demand: Empirical evaluation across countries
利用2014-2022年多国季度数据，首次估计加热烟草和卷烟的自价格弹性和交叉价格弹性，发现加热烟草需求对价格更敏感，且两者为弱替代品，对税收政策有参考价值。
The market for heated tobacco products (HTPs) has grown rapidly in recent years, and many governments have started to include HTPs in tax codes to regulate their use. Currently, the evidence on how HTP prices impact tobacco use behaviors or whether consumers consider them as economic substitutes for cigarettes is lacking. This study is the first to answer these questions with a unique database to assess the own- and cross- price elasticities of HTP and cigarette demand. We collect a unique database of quarterly retail prices and sales of heated tobacco units and comparable scale cigarettes from 2014 to 2022, available for most countries where both HTPs and cigarettes are sold, and estimate the own- and cross- price elasticities of cigarette and HTP demand using a seemingly unrelated regression model. We find that HTP demand is price elastic (i.e., sensitive to prices) and has an own-price elasticity of -1.2 to -1.3, about four times greater than the own-price elasticity of cigarettes, which is about -0.3. We also find that cigarettes and HTPs are weak economic substitutes: while HTP demand is responsive to higher cigarette prices, cigarette demand is not sensitive to HTP prices. Our results suggest that tax policies that increase HTP and cigarette prices simultaneously will reduce HTP consumption without increasing cigarette consumption.