Is cigarette smoking in poorer nations highly sensitive to price? Evidence from Russia and China.

We examine cigarette demand in China and Russia using longitudinal micro-level household and community surveys. Previous developing-country price elasticity estimates of around -0.75 have been larger than United States estimates of about -0.4, but the former have relied primarily on aggregate data. In contrast, our micro-level price elasticity estimates in China and Russia range from 0 to -0.15. Thus, raising prices in poorer countries may not reduce smoking to the degree previously suggested.