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Segment-level elasticity data is what makes tiered pricing defensible

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Simulation of the impact of tax increase on consumption and government revenue Based on the available administrative data and the estimated elasticities, table 6 outlines the impact of an increase in the specific excise tax and cigarette prices on cigarette consumption and government revenue from cigarettes assuming the scenarios of an increase in specific excise by 25% in 2019 compared with 2018.22 The simulation shows that an increase in specific excise by 25% in 2019 compared with 2018 would decrease cigarette consumption by 14.8%, while public revenue would increase by 2.3%