Quirmbach, D; (2015) The economics of smoking in Russia: evidence from the Russia Longitudinal Monitoring Survey (RLMS-HSE). Doctoral thesis , UCL (University College London).

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Abstract

This thesis contributes to our understanding of tobacco consumption, one of the leading causes of premature mortality in Russia. While smoking has received less attention in the literature compared to hazardous alcohol consumption in Russia, it is increasingly the focus of government policy, as illustrated by a restrictive anti-smoking law which was passed in 2013 and which, among other things, foresees substantial tax increases, some of which have already been introduced. The few studies examining price responsiveness of smoking in Russia have identified very low price elasticities compared to those found for other countries, thus calling into question the effectiveness of tax increases as a means of reducing consumption. In this thesis we draw on 10 years of individual-level longitudinal data from the Russia Longitudinal Monitoring Survey (RLMS-HSE) and regional-level government statistics to examine the longer-term development of smoking patterns in Russia and to model the demand for cigarettes. After setting out the context of smoking in Soviet and post-Soviet Russia, which in both periods is characterised by high affordability and easy availability of cigarettes, coupled with only minimal tobacco control measures, the second part of the thesis examines patterns of smoking across the life-course over the past 6 decades and establishes some stylised descriptive facts regarding the associations of smoking with important socioeconomic and geographic characteristics. Building on this descriptive evidence, we develop an empirical model of cigarette demand in Russia, starting with a static model capturing the influence of factors such as price, income or education on consumption, and then moving to a dynamic specification that additionally accounts for the habit-forming effects of cigarette consumption. We find that price elasticities are small, but meaningful, that social factors and peer effects are more significant drivers of smoking and that smoking is strongly persistent within individuals. A key theme emerging from both the descriptive and econometric analyses is the strongly gendered nature of consumption patterns, which suggests that to successfully reduce the prevalence of smoking, policy measures should take into account the different gender norms towards smoking.

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