Conference Agenda

To control the illicit cigarette market, the government adopted a Tracking and Tracing System (TTS) for many excisable goods including cigarettes. Though the TTS was implemented in 2021, it became operational in July 2022, because of numerous legal and market challenges. Despite these roadblocks, the TTS has been mostly successful and by December 2023, most tobacco companies had either installed TTS or registered their brands with the tax authority.

This paper evaluates the impacts of the TTS on the size and types of illicit trade in tobacco products. We collect cigarette packs from waste recycled stores in the 10 most populous cities of Pakistan to evaluate illicit trade penetration. We also compare the results with a similar study using the same method and completed prior to the TTS. This is the first independent estimate of the proportion of non-complaint cigarette packs consumed in urban areas of Pakistan since the implementation of TTS.

We conducted a nationally representative volumetric choice experiment (VCE) of 700 US adults aged 21+ who vape ECs in the past 30 days during April-May 2023. Each participant reported their spending on nicotine or tobacco products and was asked to make purchases for monthly use among 9 sets of products, Zero-inflated negative binomial models were used to estimate the own- and cross- price elasticities among these products, while controlling for individual-level spending and sociodemographic characteristics. Increasing prices reduces the purchases of nicotine or tobacco products among US adults who vape ECs. Increasing EC prices likely did not lead to increasing cigarette purchases among people who vape ECs. However, this result depends on model specifications and subpopulations, such as EC-cigarette dual use status. Future research is needed to inform the best design of EC taxes by EC models and components, given their complex economic relationships.