Affordability, or the price of tobacco products in relation to the income of tobacco users, is recognized
as a key determinant of tobacco use behavior. While increasing prices is known to reduce consumption
and demand for tobacco products, the effect of income growth on increasing demand can more than
offset the negative effect of price increases and the net effect can be an increase in demand. Thus the
effectiveness of price increases as a deterrent to tobacco use depends on how much prices increase in
relation to income of the potential users. The affordability of tobacco products is widely recognized as
an index for benchmarking tobacco taxation in low- and middle- income countries (LMICs), especially in
countries that are experiencing rapid economic growth. The aim of the present study is to examine the
trend in affordability of tobacco products in Bangladesh, a country that has experienced rapid
increases in income and whose World Bank classification has changed from low-income to lower-
middle income country in 2015.
The present study uses nationally representative individual level cohort data from the International
Tobacco Control (ITC) Bangladesh Survey, conducted in four waves in 2009, 2010, 2011-12 and 2014-
15, to measure the affordability of tobacco products in terms of Relative Income Price (RIP). In the
existing literature, RIP is defined as the percentage of per capita income needed to purchase 100 packs
of cigarettes. We measure RIP based on individual self-reported price and self-reported household
income group, which is supplemented by the per capita household income data from the Bangladesh
Household Income and Expenditure Survey 2010.   
Using univariate analysis, we examine the level and distribution of affordability of cigarette, bidi and
smokeless tobacco products across the four waves of the ITC Bangladesh Survey. Due to the individual
level measurement of affordability, this study allows us to examine both the level and shift in the
distribution of affordability for multiple tobacco products, particularly the cheaper tobacco products
consumed by the low-income people. We also observe the variation in affordability across population
sub-groups and over time for cigarette, bidi and smokeless tobacco products controlling for individual
socio-economic characteristics in multivariate regression analysis.
The results of the analysis show that both cigarettes and bidis became more affordable in Bangladesh
over the period from 2009 to 2015 and the affordability of smokeless tobacco products remained
unchanged between 2011-12 and 2014-15. While the price of cigarettes increased in real terms and
the price of bidis decreased over this period, income growth more than offset the negative effect of
the cigarette price increase on cigarette demand, resulting in a shift in preference from bidis to
cigarette smoking. The growing trend of affordability of cigarettes both in absolute terms and relative
to bidis portends further growth of cigarette smoking in Bangladesh.