Price of tobacco

The researchers asked nearly 1,500 daily smokers from the Netherlands how many manufactured or hand-rolled cigarettes they would buy and smoke in one day at eight different prices. The price range was €0 to €6 per cigarette and €0 to €4 per gram of rolling tobacco. The results show how many cigarettes an individual would smoke if tobacco were free, to what extent consumption decreases as the cost increases, and at what price the smoker would no longer buy tobacco at all. Dutch smokers appear willing to pay a lot of money for tobacco; a third reported no aversion to paying even the highest price.

According to the researchers, this illustrates not only how addictive, but also how affordable cigarettes are. Figures from the World Health Organization (WHO) show that cigarettes are almost twice as affordable in the Netherlands as in the United Kingdom. “People adjust their consumption when they notice the difference in their wallet: when something becomes more or less affordable,” says UM researcher Cloé Geboers. “So big hikes in excise duty, like the €1 increase in 2020, are highly desirable when it comes to discouraging smoking. They have the greatest effect.”

Excise duty

A manufactured cigarette in the Netherlands currently costs on average €0.36, a hand-rolled cigarette €0.22. The average price at which daily smokers claimed they would quit or at which demand becomes elastic is between €2 and €3.50 per cigarette. People who smoke rolling tobacco are considerably more sensitive to price rises. The researchers see considerable scope to increase the excise tax on tobacco products, although they stress that the prices for manufactured versus hand-rolled cigarettes should remain in the same ballpark to prevent people from switching to rolling tobacco instead of quitting.

“The National Prevention Agreement has two primary target groups: young people and people with a lower socioeconomic status,” says Geboers. “Our research shows that people with a lower income and a low degree of nicotine addiction—often young people—are particularly price sensitive. But it remains important to combine hikes in excise duty with other measures, such as reimbursing the costs of smoking-cessation courses.”