But because smoking, like takeout food and store-made coffee, hits our wallets in a series of small purchases, it can be easy to overlook how much you're spending. Still, it has a psychological impact: One of many reasons governments implement cigarette taxes is to reduce smoking among price-conscious consumers.
It works: Research shows that people smoke less as cigarettes get more expensive. As tobacco giant Philip Morris (PM) stated in its 10-Q for the Securities and Exchange Commission on Nov. 3, 2008, "Tax increases are expected to continue to have an adverse impact on sales of tobacco products by our tobacco subsidiaries, due to lower consumption levels."
Smokers will have a lot to ponder in coming months, as the Department of Health and Human Services implements its new packaging policy requiring warning labels that include graphic photos of the health damages caused by smoking. In the meantime, we wanted to know how sensitive smokers are to the price of their cigarettes, so we hit the streets of Manhattan during lunchtime to find out.
