... the fact that between November 1998 and April 2002 wholesale manufacturers prices rose eightfold (Tobacco Outlook Report, 2003). During the same time period there was not an eightfold reduction in smokers even taking into account the people that quit for health reasons. Education around the health dangers of smoking is responsible for a larger part of the total reduction in cigarette sales (Sahadi 2005). So we can conclude that increased taxes have a moderate effect on cigarette sales. Governments have come to rely on incomes from cigarette taxes have increased over the last 50 plus years (Centers for Disease Control and Prevention: Morbidity and Mortality Weekly Report [serial online]. 2002). The reduction in consumption is a moderate effect of increased prices (including tax) due to the to the price inelasticity of demand. As mentioned earlier, much of the decrease is due to an increased awareness of the health hazards ...

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