Cigarette tax, economic welfare and social class patterns of smoking

Abstract

The divergence in social class patterns of smoking in the last two decades means that now only half as many professional men (social class 1) smoke as do unskilled working men (social class 5) and mortality from smoking related disease is becoming predominantly a lower social class problem. The changes in smoking patterns have been attributed to the greater influence of antismoking publicity in the higher social classes while the influence on social class smoking of other factors such as taxation or advertising has been largely unknown. This study presents a method for assessing the impact of cigarette tax on members of different social classes. Responses to tax changes over 17 years are analysed and a method developed for estimating the effects of price changes on tax paid, expenditure on cigarettes and economic welfare. The results suggest that smokers of lower social class may be more responsive to tax changes and that cigarette tax increases may not be regressive. Cigarette prices in the UK are still some 25 % below the 1948 real price leveL The downward drift in prices may have effectively increased the smoking levels of lower socioeconomic groups relative to social classes 1 and 2 and may have been a major factor in the divergence in social class smoking. I. SMOKING PROFILES The United Kingdom stin experiences high smoking levels. About 3.4% of all consumer expenditure is spent on tobacco (Central Statistical Office, 1982) and this represents the highest per capita consumption in the European Economic Community (Commission of the European Communities, 1982). It is by no means evenly spread throughout the population, but is mostly concentrated in the lower social class groups (OPCS, 1982). Before the anti-smoking health publicity of the early 19605, there was very little difference between the smoking habits of different social classes in the UK. Around 60 % of men and 45 % of women in each class smoked cigarettes (Fig. 1). Since that time the pattern of smoking has been characterized by a widening divergence in smoking between members of different social classes, an overall increase in the number of cigarettes smoked by the average smoker and a narrowing of the difference in women and men's smoking habits. By 198549 0/, of unskilled working men (SC5) smoked cigarettes, while only