1. Estimate the effect of prices and taxes on the demand for tobacco products.
   
   
2. Examine the effect of economic incentives on smoking initiation and cessation.
   
   
3. Estimate the impact of other factors on the demand for tobacco products, including tobacco control policies, tobacco industry advertising and promotion, information on the health consequences of tobacco use, socioeconomic and demographic factors.
   
   
4. Examine issues related to the globalization of the tobacco industry, trade liberalization, and privatization.
   
   
5. Study the impact of tobacco control policies on employment in tobacco farming, manufacturing, wholesaling, retailing and in other sectors.
   
   
6. Estimate the health care and social costs of tobacco use, including the net versus gross health care costs, other economic and social costs from tobacco use, and the public versus private shares of these costs.
   
   
7. Examine equity issues related to tobacco use and tobacco control, including estimating the differential impact of tax increases on low and high income households, determining the differential health benefits of tobacco control interventions for the rich and the poor, and related issues.
   
   
8. Describe the impact of tobacco use on household expenditure patterns, including examining differences across households based on income levels.
   
   
9. Examine issues related to smuggling of tobacco products, including estimating the share of current tobacco product consumption originating in illegal markets and estimating the impact of higher tobacco taxes and other control policies on smuggling.

Estimate the effect of prices and taxes on the demand for tobacco products.
Estimates from high-income countries indicate that a ten percent increase in cigarette prices will lead to about a four percent reduction in overall cigarette demand, with about half of this effect the result of reduced smoking prevalence (from increased cessation and reduced initiation/re-initiation) and the other half resulting from reduced cigarette consumption among smokers. Moreover, these studies find that younger persons and lower-income/less-educated persons are most responsive to higher tobacco product prices (Chaloupka and Warner 2000). More recent estimates from low and middle-income countries suggest that demand in these countries is more responsive to price than demand in high-income countries (Chaloupka et al., 2000). This program would support country-level and regional research that estimates the price elasticity of cigarette and other tobacco product demand using both aggregate and household/individual-level data. These estimates are critical to fully understanding the impact of tax increases on cigarette smoking and other tobacco product use, tobacco tax revenues, and more. Moreover, subpopulation estimates, particularly for the poor and the young, are necessary for fully understanding the impact of tax increases on particularly high-risk populations and on the incidence/potential regressivity of tobacco taxes.

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Examine the effect of economic incentives on smoking initiation and cessation.
Studies using cross-sectional data provide conflicting results on the effect of price and/or cigarette tax on smoking initiation. Some findings suggest that higher cigarette prices and excise taxes do not affect smoking initiation, some offer evidence to the contrary. The studies usually agree on positive price/tax effect on smoking cessation. However, cross-sectional data suffer from several limitations including a possible under reporting and recall bias among survey participants, possible incorrect match between cigarette prices at the time of smoking initiation or cessation, attempt to measure a dynamic process with information from one point in time, and the possibility that social sources of cigarettes disguise the effect of price on smoking initiation and experimentation. Studies using the longitudinal data more suitable for this type of analysis concluded that higher cigarette prices/taxes decrease the probability of smoking initiation and increase the probability of smoking cessation

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Estimate the impact of other factors on the demand for tobacco products, including tobacco control policies, tobacco industry advertising and promotion, information on the health consequences of tobacco use, socioeconomic and demographic factors.
A large empirical literature from high-income countries clearly indicates that information shocks, strong tobacco control policies, and a variety of other factors significantly impact on tobacco demand (Chaloupka and Warner 2000; Jha and Chaloupka 2000). In contrast, there is almost no information on the impact of these factors on cigarette smoking and other tobacco product demand in Southeast Asian countries. This program would work with researchers in the region to identify appropriate measures for inclusion in empirical studies of tobacco product demand, to uncover the necessary data, and to appropriately specify demand models that include these measures.

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Examine issues related to the globalization of the tobacco industry, trade liberalization, and privatization.
The very limited research in this area indicates that trade agreements that have opened tobacco markets in Thailand and other Asian countries led to significant increases in cigarette smoking in these countries (Chaloupka and Laixuthai 1996), while trade liberalization more generally has increased tobacco use, particularly in low and middle-income countries (Taylor, et al. 2000). Even less is known about the impact of the privatization of domestic tobacco monopolies and other direct investment of the multinational tobacco companies on tobacco markets globally, and particularly in Southeast Asia where the Thai tobacco monopoly and others have been or are likely to be privatized. Understanding the consequences of trade liberalization and privatization at the country-level is vital to developing appropriate tobacco control policies and other interventions.

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Study the impact of tobacco control policies on employment in tobacco farming, manufacturing, wholesaling, retailing and in other sectors.
One of the most frequently used arguments against tobacco control is that it will lead to significant job losses, particularly among tobacco farmers and those employed in tobacco product manufacturing. However, these arguments almost always significantly overstate these losses and fail to recognize that the money not spent on tobacco products as the result of tobacco control activities will be spent on other goods and services, generating additional employment. Indeed, in most countries, there will be no net effect or even a positive effect of reduced tobacco use on overall employment (Jacobs, et al. 2000). Nevertheless, it is critical to develop country-level estimates of the economic impact of tobacco growing and manufacturing, as well as of tobacco control activities in order to alleviate concerns about the macroeconomic effects of tobacco control.

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Estimate the health care and social costs of tobacco use, including the net versus gross health care costs, other economic and social costs from tobacco use, and the public versus private shares of these costs.
In developed countries, a significant share of health care expenditures at any point in time are the result of treating tobacco-attributable diseases; while the net health care costs of tobacco (those that account for the longer lives of nonsmokers) are less than these gross costs, they are still significant (Warner, et al. 1999; Lightwood, et al. 2000). Much less is known about the impact of tobacco use on health care and other economic costs in low and middle-income countries. Appropriate, country-level research on current and expected future costs would be helpful in convincing policymakers of the importance of interventions to reduce tobacco and in developing appropriate tobacco taxes and other control policies.

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Examine equity issues related to tobacco use and tobacco control, including estimating the differential impact of tax increases on low and high income households, determining the differential health benefits of tobacco control interventions for the rich and the poor, and related issues.
Tobacco use in most countries is increasingly concentrated in the lowest income populations and, for the countries in which it has been examined, smoking accounts for most of the mortality gap between the rich and the poor (Bobak, et al.2000). However, opponents of tobacco control interventions, particularly higher tobacco taxes, often argue that these will impose an unfair burden on the poor. Country-level research on the distribution of tobacco use and the health consequences of tobacco use by income-level, the incidence of tobacco taxation, and the differential response of poor and rich smokers to higher tobacco taxes is needed to inform the development of appropriate tobacco control interventions, including policies designed to reduce inequities.

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Describe the impact of tobacco use on household expenditure patterns, including examining differences across households based on income levels.
This research would, for example, examine the tradeoffs between spending on tobacco and spending on food and other necessities, particularly among the poor. Very few studies have examined this issue. One recent study from Bangladesh suggests, for example, that children's nutrition and consumption of other necessities would be significantly increased if male smoking rates were reduced (Efroymson and Ahmed 2000). Country-level studies that clearly describe household spending patterns and the share of household income spent on tobacco products, particularly across different income groups, would be particularly informative in describing the potential benefits of tobacco control interventions.

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Examine issues related to smuggling of tobacco products, including estimating the share of current tobacco product consumption originating in illegal markets and estimating the impact of higher tobacco taxes and other control policies on smuggling.
Another commonly used objection, particularly from the tobacco industry, to higher tobacco taxes is that these taxes will lead to massive increases in smuggling, reducing tobacco tax revenues and increasing crime, but not leading to significant reductions in tobacco use. As with many of the other economics-based arguments against tobacco control, this argument overstates the consequences of higher tobacco taxes (Joossens, et al. 2000; Merriman et al. 2000). Providing country-level and regional analyses that describe both the magnitude of current cigarette smuggling and the impact of increased tobacco taxes and other control policies on smuggling are vital for countering these arguments.

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