A comparison of alternative methods for measuring cigarette prices

Area of Science:

• Public Health
• Economics
• Tobacco Control Research

Background:

• Accurate cigarette price data is crucial for government agencies, public health organizations, and tobacco control researchers.
• The Tax Burden on Tobacco (TBOT) has been the primary source for cigarette price data since the 1950s, despite known limitations.

Purpose of the Study:

• To compare cigarette prices and data collection methods between the TBOT and the Tobacco Use Supplement to the Current Population Survey (TUS-CPS).
• To evaluate the validity of TUS-CPS data for estimating the actual price smokers pay for cigarettes.

Main Methods:

• Constructed state-level cigarette price measures from TUS-CPS data, including weighted average prices per pack and per carton.
• Compared TUS-CPS prices with TBOT data for the 2003 and 2006/2007 survey waves.
• Developed measures of tax avoidance using self-reported data from TUS-CPS.

Main Results:

• TUS-CPS average prices were lower than TBOT prices by 71 cents per pack in 2003 and 47 cents in 2006/2007.
• Significant state-level price differences were observed between TUS-CPS and TBOT.
• Price discrepancies varied by state, influenced by tax avoidance strategies like cross-border purchasing.

Conclusions:

• The TUS-CPS is a valid source for constructing cigarette price measures.
• TUS-CPS data captures price-reducing marketing, tax avoidance, and non-traditional purchasing, offering a more realistic "real" price estimate.
• Self-reported data in TUS-CPS demonstrates advantages over TBOT for assessing the actual price burden on smokers.