How increasing tobacco prices affects the decision to star and quit smoking: evidence from Argentina

Abstract

We study empirically the role of cigarettes prices on smoking onset and quitting in Argentina, using a continuous-time split population model. The findings in this paper suggest that increasing cigarettes prices, using taxes, has a larger effect on the starting age of smoking than on the quitting age. In particular, at the mean starting age of 15 years an increase of 20% in real cigarettes prices is expected to delay smoking onset by 3 years. On the other hand, the same policy is less effective to reduce the duration of the habit because, while negative, the relationship between the duration of the smoking habit and the real price of cigarettes is weak. A policy recommendation that emerges from this evidence is that for people with a developed addiction a combination of an increment in taxes and other public health policies, like cessation therapies, could be implemented to accelerate the time of quitting smoking.