Cigarette consumption in The Netherlands 1970-1995 - Does tax policy encourage the use of hand-rolling tobacco?

Background: Tax rises to reduce cigarette consumption are a major feature o f European tobacco control policies. In many countries, hand-rolling tobacc o is much cheaper than manufactured cigarettes. We Investigated whether cha nges in price differentials between manufactured and hand-rolled cigarettes influenced cigarette consumption in The Netherlands. Method: We developed regression models to explain changes in the consumption of the two cigarett e types. Price elasticities, the percentage changes in consumption for a 1% change in price, are calculated from Netherlands data for 1970-1980 and 19 85-1995. Results: The ratio of manufactured to hand-rolled cigarette prices changed little during 1970-1980 but varied subsequently. On multivariate a nalysis, manufactured cigarette consumption in 1970-1980 decreased as its p rice rose (elasticity = -0.74). In 1985-1995, manufactured cigarette consum ption fell with increases in both its own price (elasticity = -0.54) and in the price differential between manufactured and hand-rolled cigarettes (el asticity = -0.60). During 1985-1995, roll-your-own consumption fell as the price ratio of manufactured to hand rolled cigarettes fell (elasticity = +1 .0). Conclusion: When the price rise for hand-rolling tobacco is greater th an the price rise for manufactured cigarettes, the fall in manufactured cig arette consumption is accompanied by a fall in roll-your-own use. Cigarette smokers are deterred from switching to hand rolled cigarettes instead of s topping smoking. This increases the health benefits of raising taxes on man ufactured cigarettes, discourages the use of even more harmful forms of tob acco and may reduce inequalities in health.