Smokeless tobacco use in India: Role of prices and advertising

Although the primary form of tobacco use worldwide is cigarette smoking, the large majority of users in India consume smokeless forms of tobacco. There is little evidence on the role of policy-related factors in shaping the demand for smokeless tobacco (ST) in India. This study evaluates the relationship between two such factors, prices and advertising, and ST use in India, using data on 67,737 individuals from the Global Adult Tobacco Survey (GATS) India 2009. We find that ST advertising is more likely to influence ST consumption in women than men, while men are more likely to respond to changes in ST price. We estimate that among adult males in India, the total price elasticity of ST demand is −0.212, which is close to estimates reported for males in the U.S. We do not find strong direct evidence on the economic substitutability or complementarity of smoked and smokeless products. However, the positive association between former smoking and current smokeless use may point to temporal substitutability at the individual level. The findings have implications on the relative effectiveness of policy tools across genders in India - increasing the prices of ST products may discourage ST use particularly among men, and advertising restrictions may play a relatively larger role in the consumption behavior of women in India.