We examined the impact of tobacco prices or taxes on tobacco use in Latin America and Caribbean countries. We searched MEDLINE, EconLit, LILACS, unpublished literature, 6 specialty journals, and reviewed references. We calculated pooled price elasticities using random-effects models.
The 32 studies we examined found that cigarette prices have a negative and statistically significant effect on cigarette consumption. A change in price is associated with a less than proportional change in the quantity of cigarettes demanded. In most Latin American countries, own-price elasticity for cigarettes is likely below −0.5 (pooled elasticities, short-run: −0.31; 95% confidence interval = −0.39, −0.24; long-run: −0.43; 95% CI = −0.51, −0.35).
Tax increases effectively reduce cigarette use. Lack of studies using household- or individual-level data limits research’s policy relevance.