Increase of prices for cigarettes is one method of fight against smoking in the USA.

July 11, 2007

However, the research of the Columbian University showed that this strategy has not only advantages but also disadvantages. In particular, the strategy leads to the development of "black" tobacco market.

According to "The Washington Profile", this conclusion was made on the basis of the analysis of the situation, arose in Harlem – famous district of New-York where live, low-income people who belong to race and ethnic minority.

Price increase caused the following consequences: numerous tobacco sellers, who give out cigarettes for the lower price, appeared in Harlem immediately. The get cheap cigarettes with the help of different methods: they purchase cigarettes in other countries or other USA states, on sales etc.

According to the USA Ministry of Agriculture, in June of 2007 the average sale price for one cigarettes pack was $2.28. Each pack is subjected to the tobacco tax of the state (appr. $1.05), sale tax, imposed by the state ($0.20). Moreover, logistic and trade expanses added, raise the price of one pack by $0.59.

According to the information from the publication, average cigarettes pack in USA costs $4.50. However, there are different taxes in every state. As to the public organization “Campaign for Tobacco Free Kids” tobacco-producing states of the USA impose the lowest tax on cigarettes – 33.5 cents for a pack, and states, which don't depend on tobacco-producers - $1.14.

The most expensive cigarettes are in New-Jersey state - $6.45 for one pack. In neighboring New -York cigarettes are cheaper - $5.77. The cheapest cigarettes are sold in Mississippi - $3.55.

Due to such considerable difference in prices, there is a developed criminal market of cheap cigarettes' contraband between states, where taxes are higher.

Earlier, the research of the USA Ministry of Health showed that increase of prices on cigarettes by 10% allows to deter 7% of minors from smoking.