Price hike likely to accelerate drop in smoking rate

South Korea's smoking rate has steadily declined over the years, indicating that a large price increase currently sought by the government may help significantly cut the rate, government and market sources said Friday.

According to the health ministry and the statistics service, the amount of money spent on tobacco by each household of more than two persons came to an average of 18,351 won (US$16.91) per month last year, or 0.75 percent of the average income of such households.

The proportion dropped from 1.14 percent in 2005 to 0.96 percent in 2008 and again to 0.77 percent in 2011.

Such a steady drop came amid small, but repeated increases in tobacco prices over the past seven years, suggesting many may have simply chosen to quit smoking instead of cutting down on their cigarette consumption.

In fact, the country's overall smoking rate dropped from 28.8 percent in 2005 to 27 percent in 2011, according to the Ministry of Health and Welfare.

Unlike smoking, price increases appeared to have little effect on drinking. The amount of money each household spent on drinking accounted for 0.38 percent of their average monthly income in 2005 but expanded to 0.39 percent in 2009 and to over 0.4 percent last year.

"This is because when the price of alcohol is increased, consumption gradually recovers after a temporary decline, but when the price of tobacco is increased, many people simply choose to quit," a market observer said.

The health ministry earlier said the average cigarette price needs to be raised to 7,000 won per pack from the current 2,500 won to reduce the country's smoking rate to what it called a desirable rate.

A ruling party lawmaker recently submitted a bill calling for a 2,000-won increase on all tobacco products.

The observers said such a large price hike, considering what a several-hundred-won increase did in the past, may result in a much greater cut in the smoking rate. (Yonhap News)