The Impact of a Federal Cigarette Minimum Pack Price Policy on Cigarette Use in the USA

Background: 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.

Objective: To examine the potential effect of federal minimum price regulation on the sales of cigarettes in the USA.

Method: 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.

Results: 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.

Conclusion: 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.