Increasing cigarette prices reduce cigarette use. The US Food and Drug Administration has the authority to regulate the sale and promotion—and therefore the price—of tobacco products.
To examine the potential effect of federal minimum price regulation on the sales of cigarettes in the USA.
We used yearly state-level data from the Tax Burden on Tobacco and other sources to model per capita cigarette sales as a function of price. We used the fitted model to compare the status quo sales with counterfactual scenarios in which a federal minimum price was set. The minimum price scenarios ranged from $0 to $12.
The estimated price effect in our model was comparable with that found in the literature. Our counterfactual analyses suggested that the impact of a minimum price requirement could range from a minimal effect at the $4 level to a reduction of 5.7 billion packs sold per year and 10 million smokers at the $10 level.
A federal minimum price policy has the potential to greatly benefit tobacco control and public health by uniformly increasing the price of cigarettes and by eliminating many price-reducing strategies currently available to both sellers and consumers.