Objectives: The government of the Republic of Korea (ie, South Korea) drastically increased cigarette prices by 80% in 2015. The exogenous regulatory change provided us with an opportunity to examine the effects of the cigarette price increase on smoking behavior. Methods:
Utilizing 2011-2016 balanced panel data from the Korea Health Panel (3693 participants each year), we divided the sample into smokers and non-smokers and traced each individual's smoking behavior. Results: Overall smoking prevalence (OR = 0.476, p < .01) and daily cigarette consumption
(IRR = 0.737, p < .01) were reduced after the cigarette price increase. However, although the cigarette price increase was inversely related to smokers' cigarette consumption (OR = 0.799, p < .01), we found no statistically significant impact on smoking cessation among smokers. On the
other hand, the cigarette price increase was associated with decreased smoking onset among non-smokers (OR = 0.172, p < .01) and reduced cigarette consumption after they started smoking (IRR = 0.279, p < .01). Conclusions: The reduction in smoking prevalence after the increase
of the cigarette price resulted from the fact that non-smokers did not start smoking rather than from a decrease in the number of existing smokers.
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REPUBLIC OF KOREA;
Document Type: Research Article
Daehwan Kim, Associate Professor, Department of Economics, Dong-A University, Busan, South Korea
Hojin Park, Doctoral Student, Department of Economics, University of Kansas, Lawrence, KS, United States;, Email: [email protected]
March 1, 2021
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