Background:
Differential demand elasticities for WTPs across various population subgroups and differential response patterns to taxation, need to be considered in tobacco taxation policies.

Objective:
This article aims at modelling the demand for waterpipe tobacco smoking (WTS) across various population groups in Lebanon.

Methods:
We estimated own- and cross-price elasticities of demand for waterpipe tobacco products (WTPs) using a volumetric choice experiment that yielded waterpipe tobacco purchase data from a nationally representative tobacco survey conducted in 2019.

Results:
While own-price elasticities for premium cigarettes are significantly different across two out of three population subgroups, documenting statistically significant differential price responsiveness across different sub-populations for WTPs varies with the cut-off used to define subgroups. We document different price sensitivities towards discounted WTPs between younger (aged 18–45 years) and older smokers (aged >45 years), the latter being significantly more price responsive (elasticities of -1.6 and -2.1, respectively). Our findings also reveal that smokers with high-income levels are significantly less responsive to changes in prices of premium waterpipe café products in comparison to smokers with low-income levels (elasticities of -2.2 and -2.9, respectively). Lastly, we document that light smokers are significantly more sensitive than heavy smokers to price changes of discounted waterpipe café products (elasticities of -2.5 and -1.8, respectively). We additionally examine the impact of waterpipe tobacco specific excise taxation on consumption by simulating various tax scenarios ranging from a ‘status quo’ scenario reflecting past policy in Lebanon to a tax level amounting to 75% of the total retail price. Our findings suggest that a 75% scenario yields a substantial reduction in waterpipe tobacco consumption ranging from 78% to 95% fewer waterpipe tobacco sessions across population groups. Reduction rates are almost equal for younger and older smokers, and relatively more pronounced for low-income and heavy smokers in comparison with high-income and light smokers.

Conclusions:
These findings support the need to account for differential demand elasticities for WTPs across various population subgroups, and the differential response patterns to taxation, when considering tobacco taxation policy.