Cigarette Affordability in Colombia

Because consumers’ purchasing behaviors are influenced by product price and their own disposable income, economists use the ratio of these two factors to determine product affordability. Such a ratio can be interpreted as the percentage of income that is needed to buy the product (relative income price). The greater the proportion of income required to purchase cigarettes, the less affordable these products are.

Although price of cigarettes increased in Colombia from 2007 to 2017, prices barely kept pace with inflation. Because incomes in Colombia grew faster than cigarette prices, cigarettes became more affordable.