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1047778

review-article2021
SJP0010.1177/14034948211047778Kjeld et al.Price elasticity of demand for cigarettes among youths

Scandinavian Journal of Public Health, 2023; 51: 35–43

Literature Review

Price elasticity of demand for cigarettes among youths


in high-income countries: a systematic review

Simone Gad Kjeld , Maja Bæksgaard Jørgensen,


Maria Aundal & Lotus Sofie Bast

National Institute of Public Health, University of Southern Denmark, Denmark

Abstract
Aims: Smoking in youth remains a major public health issue. As increasing tobacco prices is considered one of the most
effective prevention strategies, examining youth’s responsiveness to price changes on cigarettes will provide crucial
knowledge. This study aims systematically to review research examining the price elasticity of demand for cigarettes among
youths (<30 years of age) in high-income countries. Methods: Searches were conducted in three databases (Web of Science,
Pubmed and Scopus). Inclusion criteria were publications within the past 10 years (2011–2021) written in English and with
a population of youths below 30 years of age, concerning price elasticity of demand for cigarettes and from high-income
countries. Searches were screened by two independent reviewers and the quality of studies was assessed using a quality
assessment tool. Results: Four outcomes related to price elasticity of demand for cigarettes were examined in six studies
included in this review; that is, cigarette initiation, consumption, prevalence and cessation. Overall, findings indicate that
increasing tobacco prices affect youth tobacco use. The effect was associated with gender and age; young women were more
price sensitive concerning smoking initiation, whereas young men were more price sensitive concerning cigarette prevalence
and consumption. Moreover, younger age was associated with higher price elasticity. Conclusions: Estimates for price
elasticity varied across the included studies. This may be caused by differences in data sources, collection
methods used and country of origin. Most included studies were of older date. Therefore, to make reliable
predictions of the expected effects of increased tobacco prices, further examinations of up-to-date and locally
embedded measures are required.

Keywords: Systematic review, price elasticity of demand, youth, cigarettes, smoking, tobacco, high-income countries

Introduction After decades of falling smoking prevalences, some


measures indicate increasing smoking prevalences
Smoking is the leading cause of preventable deaths among some youths [5, 6], while others indicate a
and one of the largest health problems globally. recent decrease in daily but not occasional smoking
According to the World Health Organization (WHO), among some parts of the youth [7, 8]. In 2020, about
more than 8 million people die every year from tobacco 20% of 15–29 year-olds were currently smoking ciga-
use and 1.2 million die from second-hand smoking rettes, of which approximately half were smoking ciga-
[1]. In Denmark, more than 13,000 are expected to rettes on a daily basis [9].
die from a smoking-related disease annually [2], and The health consequences of smoking increase
among those who smoke on a regular basis, up to two- with earlier age of smoking initiation [10, 11]. For
thirds are expected to die from a disease caused by example, cigarettes contain nicotine, which is addic-
smoking [3, 4]. This makes smoking the single biggest tive, and especially the young brain seems to be
cause of illness and preventable deaths in Denmark. highly affected by early tobacco initiation [12].

Correspondence: Simone Gad Kjeld, National Institute of Public Health, Southern University of Denmark, Studiestræde 6, 1455 Copenhagen, Denmark.
E-mail: simk@sdu.dk

Date received 28 May 2021; reviewed 16 July 2021; accepted 2 September 2021

© Author(s) 2021
Article reuse guidelines: sagepub.com/journals-permissions
DOI: 10.1177/14034948211047778
https://doi.org/10.1177/14034948211047778
journals.sagepub.com/home/sjp
36    S.G. Kjeld et al.
Further, research has evidenced that earlier initiation the new regulations of the action plan consist of neu-
of cigarette smoking predicts continued use in adult- tral packages and a stricter advertising ban; stricter
hood, heavier use and difficulties with smoking ces- requirements for nicotine products; banning all
sation [13]. Between 70% and 90% of current smoking in or around schools during school time;
smokers initiated their tobacco use before they increased control of the age limit; and restrictions on
turned 18 years old [8, 14]. Therefore, to solve the taste in tobacco products.
current tobacco issues, preventing children and Although several studies confirm that youths in
youths from starting to smoke is a main priority. particular are sensitive to increases in price on
There exist numerous strategies to reduce smok- tobacco products, there is limited up-to-date and sys-
ing. The WHO has developed a framework conven- tematically reviewed knowledge about to what extent
tion on tobacco control (FCTC), which is an action youths in high-income countries are affected by price
and evidence-based plan to prevent and discontinue increases on cigarettes, hence the price elasticity of
smoking. This plan is called MPOWER and consists demand for cigarettes. Current systematic reviews on
of several initiatives, including monitoring tobacco price elasticity of tobacco among youths either
use and prevention policies; protecting people from include studies of older date [22], primarily include
tobacco smoke; offering help to quit tobacco use; data from low and middle-income countries [23], or
warning about the dangers of tobacco; enforcing concern other tobacco products than conventional
bans on tobacco advertising, promotion and spon- cigarettes [23]. As the tobacco market continues to
sorship; and raising taxes on tobacco [15]. In 2004, change and expand, knowledge about youths’ respon-
Denmark became a part of the framework conven- siveness to structural regulations on smoking; for
tion [16]. Research has found that price increases example, tax increases on cigarettes, is essential for
on cigarettes is one of the most effective ways to future preventive strategies, informed decision-mak-
prevent and stop young people from smoking [17]. ing and political actions against smoking. Moreover,
This may be explained by youths having lower dis- although several novel tobacco and nicotine-contain-
posable incomes compared with adults, and thus ing products have been introduced to the tobacco
they are expected to be more affected by changes in market within the past decade, cigarette smoking
prices of cigarettes. Economic theory states that the continues to be popular among the general popula-
greater the share of one’s disposable income is used tion as well as among the youth [6]. The evidence of
on one good, the more responsive one will be to the detrimental health hazards associated with ciga-
price changes on that good [18]. In this connection, rette smoking is solid [10, 11]. Moreover, most
existing research indicates that youths’ demand for research suggests that the use of diverse tobacco
cigarettes is more price elastic compared with adults products is highly interrelated; for example, users of
[17–19]. other tobacco products such as e-cigarettes and
In 2019, the Danish government presented a smokeless tobacco are at higher risk of switching to
national action plan against smoking among chil- conventional cigarette smoking, dual use and contin-
dren and youth. The plan consists of many actions, ued use in adulthood [24-26]. Therefore, investigat-
one of which is increased taxes on all tobacco and ing youths’ responsiveness to price changes on
nicotine-containing products, starting with ciga- cigarettes is critical in a public health perspective. In
rettes. In the Finance Act of 2020, the government, particular, updated and country-specific knowledge
along with other political parties, decided to increase is essential for future prevention efforts. Hence, in
the average prices of a pack of cigarettes from EUR the current study, we wished to examine the current
5.50 to 8.05. The increased price comes from a per evidence on price elasticity of the demand for ciga-
unit tax and an ad valorem tax (i.e. the ad valorem rettes among youth in countries similar to Denmark
tax is 1%. The per unit tax for cigarettes has increased and Scandinavian countries; that is, high-income
from EUR 0.18 to EUR 0.23 by 1 April 2020 and countries, with the aim of informing current and
will increase to EUR 0.26 from 1 January 2022) future strategies in relation to smoking prevention
[20]. They agreed to increase the prices over two among youths.
rounds, such that a pack of cigarettes increases to More specifically, the present study sought sys-
EUR 7.38 from 1 April 2020 and further to EUR tematically to review current research examining the
8.05 from 1 January 2022. Prices on cigars, cigaril- price elasticity of the demand for cigarettes among
los, snus and other smokeless tobacco products will youths (<30 years of age) in high-income countries.
increase by approximately EUR 1.88 from 1 April Further, the aim of mapping the current literature is
2020 and a further EUR 0.67 from 1 January 2022. to evaluate and reveal the potential need for updated
The liquids for e-cigarettes will increase by EUR and locally embedded knowledge on price elasticity
0.26 per 10 ml from 1 July 2022 [21]. In addition, of tobacco among youths.
Price elasticity of demand for cigarettes among youths   37
Methods was price elasticity and the context (Co) was ciga-
rettes. A systematic literature search was conducted
Eligibility criteria
using three scientific databases: Web of Science,
The literature searches have been carried out based Pubmed and Scopus. Keywords (subject headings/
on predefined inclusion and exclusion criteria. These MeSH terms) and free text searches (title, keywords,
criteria have been applied at different stages of the text) were used in the literature searches, and in the
work process of the literature review. While some of three search blocks relevant synonyms were included
the criteria have been used in the search, others have for the overall search terms. For the search term
been used in the screening process. First, we describe youth, synonyms were, for example, adolescents and
the inclusion and exclusion criteria that have been young adults; for the price elasticity of demand, syn-
used in the search process and, next, the specific cri- onyms were, for example, tax elasticity and price sen-
teria that have been used in the screening process are sitivity; and for cigarettes, synonyms were, for
presented. example, smoking and tobacco.

Inclusion criteria in the search process Study selection; screening, quality assessment
and data extraction
• Year of publication: Studies published within the
past 10 years (01/01/2011 to 06/01/2021) The identified titles and abstracts from the systematic
• Language: English. literature searches were screened for eligibility by two
independent reviewers (MA and SGK) and next, eli-
gible full-text articles were read and assessed by the
Exclusion criteria same two reviewers independently. Conflicts about
• Types of studies: Experimental lab studies and the assessment of articles were resolved by a discus-
opinion papers. sion after each screening process was completed. The
• Product: Other tobacco and nicotine-containing two reviewers (MA and SGK) independently assessed
products than conventional cigarettes; that is, the methodological quality of the included studies
e-cigarettes, waterpipe, smokeless tobacco, etc. using the assessment tool the quality assessment tool
for quantitative studies (Effective Public Health
Practice Project, 1998) based on five components:
Inclusion criteria in the screening process risk of selection bias, study design, confounders, data
• Purpose: Studies aimed at investigating the price collection methods, and drop out [27]. These compo-
elasticity of the demand for cigarettes for people nents were assessed for all included studies and
below 30 years of age. resulted in either a weak, moderate, or strong rating
• Type of studies: Peer-reviewed journal articles for each study. Studies with two or more weak com-
presenting original findings; for example, with a ponents received an overall assessment of weak, while
cross-sectional study design, prospective cohort studies with one weak component were rated overall
studies, and randomised controlled trials (RCTs). as moderate, and studies with no weak components
• Study population: Studies in which the main received a strong rating on the quality assessment.
emphasis of the study population is humans and Data were extracted from the included studies using a
below 30 years of age. standardised data extraction form that included infor-
• Cultural context: Studies including a study popu- mation about the origin of study, age, gender, popula-
lation from high-income countries, defined as tion size, study design and price elasticity outcomes
countries with a gross national income (GNI) as well as the reported findings.
higher than US$12,535.
• Product: Studies that examine the price elasticity Results
of cigarettes.
Characteristics of included studies
Out of the 98 studies screened on abstract and title
Data source and search strategy
level, 71 studies were assessed to be irrelevant based
We used the PICo model to define the search strat- on the exclusion criteria; for example, nine studies
egy, and thus the search strategy was divided into were excluded based on the country’s GNI; thus,
three search blocks as proposed by the model: P these studies investigated price elasticity of the
(patient/problem/population), I (phenomenon of demand for cigarettes but comprised data exclu-
interest), and Co (context). The population (P) was sively from low or middle-income countries. Other
youths below 30 years of age; the field of interest (I) reasons for exclusion were study design, study
38    S.G. Kjeld et al.
population, topic and outcomes studied. In total, 27 from 1986 to 2007. They examined the price elastic-
full-text studies were assessed for eligibility, of which ity of initiation for the overall population and strati-
six studies were considered relevant for the aims of fied by two age subgroups: 13–17 and 13–22. Price
this systematic review [28-33] (Figure 1). In the elasticities were estimated for each of the three data-
quality assessment, the studies were assessed based sets. The price elasticities across these three datasets
on five components: risk of selection bias, study differed somewhat, with an overall price elasticity
design, confounders, data collection methods and ranging from −0.11 to −0.97. A consistent trend
drop out. One study received an overall weak rating across all three datasets was found; participants were
due to weak ratings on two components: study more inelastic to price changes with increasing age.
design and confounders [28]; four studies received a Finally, one study examined the price elasticity
moderate rating due to one weak rating on the study among Chilean youths between 16 and 19 years of
design component [29–31, 33]; and one study age from 2001 to 2015 [30]. They found an overall
received a strong rating on the quality assessment price elasticity of −0.40; hence, this group of youths
with no weak ratings on either of the five compo- is relatively price inelastic concerning the initiation of
nents [32]. Two of the included studies were con- cigarette smoking. Further, they found that young
ducted in Canada [28, 29], one was conducted in women were somewhat more price inelastic com-
the US [32], one in Chile [30] and two studies com- pared with young men (−0.30 vs. −0.50).
bined data across several low, middle and high-
income countries [31, 33]. Most of the included
The price elasticity of cigarette consumption
studies had a cross-sectional study design with
repeated measurements over time, while one utilised Three studies examined the price elasticity of ciga-
a combination of longitudinal and cross-sectional rette consumption [28, 29, 33]. One of these exam-
data [32]. ined the price elasticity of cigarette consumption
among young Canadians between 15 and 19 years
from 1999 to 2005 [28]. This study found the overall
The price elasticity of demand for cigarettes
price elasticity (−0.50) to be insignificant. Further,
among youth and young people
price elasticities were also insignificant across gender
Table I summarises characteristics of the six included and, therefore, they did not report estimates stratified
studies along with reported findings concerning the by gender. The study by Cui et al. (2019) examined
price elasticity of cigarettes among youths. the price elasticity of cigarette consumption among
youth in the grades from 7 to 12 (approximately 13–
18 year-olds) in the schoolyear 2012/2013 in Canada
The price elasticity of cigarette initiation
[29]. They found an overall price elasticity of −1.02;
Four studies examined the price elasticity of cigarette hence, if cigarette prices increased by 1%, the con-
initiation [29–32]. One study investigated the price sumption of cigarettes was expected to fall by 1.02%.
elasticity of cigarette initiation among Canadian Further, they examined the price elasticity in two
youths in grades 7–12 (approximately 13–18 year- subgroups based on school grades. Here, they found
olds) in the schoolyear 2012/2013 [29]. They found students in younger grades to be more price elastic
the overall price elasticity of cigarette initiation to be compared with older students (−1.93 vs. −0.76).
−1.13, implying that if prices of cigarettes increased Finally, the study by Nikaj and Chaloupka (2014)
by 1%, the proportion of young people expected to used data from 38 counties in the time period from
initiate smoking decreased by 1.13%. Further, they 1999 to 2008 to examine the price elasticity of ciga-
found the youngest subgroup (grades 7–9) to be rette consumption [33]. Youths between 11 and 19
more price sensitive compared with older youths years were investigated. Overall, the price elasticity of
(grades 10–12). The study by Kostova (2013) used cigarette consumption was −0.94. Further, female
data from 48 countries across the world and exam- individuals were found to be relatively more price
ined the price elasticity of initiation among 8–15 inelastic (−0.81) compared with male individuals
year-olds from 1999 to 2006 [31]. Overall, they (−1.27). Hence, if the price of cigarettes increased by
found the price elasticity of initiation to be relatively 1%, the cigarette consumption among female indi-
inelastic (−0.89), and when examining the price elas- viduals was expected to fall by 0.81% and 1.27%
ticity separately for gender, male individuals were among male individuals.
more insensitive to increased prices (−0.49) com-
pared with female individuals (−1.55). The study by
The price elasticity of cigarette prevalence
Lillard et al. (2013) utilised three datasets in the US
to examine the price elasticity of initiation among Two studies examined the price elasticity of cigarette
youths between 13 and 27 years [32] in the years prevalence [28, 33]. One study investigated the price
Table I.  Summary of included studies and their reported findings on the price elasticity of the demand for cigarettes among youths.

Author Country Population (size, Method Data sources Time Outcome: Smoking Outcome: Smoking Outcome: Outcome: Quality
age, gender) period consumption initiation Smoking Smoking assessment
cessation prevalence

Ahmed Canada 29,514, 15–18 Probit, The Canadian Tobacco 1999– Overall: −0.50 (n.s.) Overall: −0.30 Weak
et al. [28] years, 52% boys 2-part Use Monitoring Survey 2005 Female: n.s. Female: −0.48
model (CTUMS), evaluation of Male: n.s. Male: n.s.
retailer behaviour towards
certain youth access to
tobacco restrictions, and
Statistics Canada’s Cansim
database
Cui et al. Canada 41,057, grade 7–12 Probit, The 2012/2013 Canadian 2012/ All: −1.02 grades All: −1.13 grades 7–9: Moderate
[29] (13–18 years), 55% linear Youth Smoking Survey 2013 7–9: −1.93 −1.57 grades 10–12:
boys regression grades 10–12: −0.76 −0.82
model
Guindon, Chile 181,624, 16–19 Discrete Chilean School Population 2001– All: −0.40 Female: Moderate
et al. [30] years, 50% boys time hazard Survey 2015 −0.50
model
Kostova 48 467,304, 8–14 Duration Global Youth Tobacco 1999– All: −0.868 Female: All: 0.40 Moderate
[31] countries years, 49% boys model Survey 2006 −1.550 Male: −0.492 Female:
0.40 Male:
0.41
Lillard et al. US NLSY97 (PSID) Discrete The National Longitudinal 1986– NLSY97, (PSID), Strong
[32] [TUS-CPS]: time hazard Survey of Youth 1997 2007 [TUS-CPS]: 13–17
5779 (14,989) model (NLSY97), the Panel year-olds: −2.68
[500,548], 13–27 Study of Income Dynamics (−0.70) [−0.28]
years, 50% (46%) (PSID), and the Tobacco 13–22 year-olds: −0.97
[48%] boys Use Supplements to the (−0.66) [−0.17]
Current Population Survey 13–27 year-olds: −0.97
(TUS-CPS) (−0.58) [−0.11]
Nikaj and 38 593,588, 11–19 2-part Global Youth Tobacco 1999– All: −0.94 Girls: All: −0.56 Moderate
Chaloupka countries years, 54% boys model with Survey 2008 −0.81 Boys: −1.27 Female: −0.13
[33] two-way Male: −0.69
fixed effects
Price elasticity of demand for cigarettes among youths   39
40    S.G. Kjeld et al.

Figure 1.  Flowchart of the screening process.

elasticity of cigarette prevalence among youths between countries across the world among 8–15 year-olds in
15 and 19 years from 1999 to 2005 in Canada [28]. the time period from 1999 to 2006 to examine the
They found an overall price elasticity of −0.30. Hence, price elasticity of cigarette cessation. They found an
if cigarette prices increased by 1%, the proportion of overall price elasticity of 0.40, which implies that if
youths that smokes was expected to decrease by 0.30%. the price of cigarettes increased by 1%, the propor-
Further, they found the price elasticity for female indi- tion of youths expected to quit smoking increased by
viduals to be −0.48 while the association was insignifi- 0.40%. Further, they studied price elasticities strati-
cant for male individuals and, thus, the study did not fied by gender and found male and female individu-
report an estimate for this group. The second study als to be similarly affected by price increases in
utilised data from 38 counties among youths (11–19 relation to cigarette cessation (0.41 vs. 0.40).
year-olds) in the time period from 1999 to 2008 [33].
They found an overall price elasticity of −0.56. Further,
Discussion
they found female individuals were less sensitive to
price increases compared with male indivisuals (−0.13 This systematic review reports on findings from six
vs. −0.69). Thus, if the price of cigarettes increased by studies assessing the price elasticity of the demand for
1%, the proportion of young men who smoke would cigarettes among youths in high-income countries. The
decrease by 0.69%, while the proportion of young number of included studies indicates the limited knowl-
women who smoke would decrease by 0.13%. edge about price elasticity among youths in high-
income countries; hence, only six studies were eligible
for inclusion. Four outcomes were examined in the
The price elasticity of cigarette cessation
included studies; that is, cigarette consumption, initia-
Only one study examined the price elasticity of ciga- tion, cessation and prevalence. As expected, most of the
rette cessation [31]. This study used data from 48 included studies showed that increasing tobacco prices
Price elasticity of demand for cigarettes among youths   41
was associated with youth tobacco use. More specifi- study was rated weak in the quality assessment due to
cally, cigarette consumption was expected to decrease two factors: study design and confounders, which may
between 0.94% and 1.02% when prices increased by to some degree explain the diverse findings in the
1%, cigarette initiation between 0.11% and 1.13%, and study compared with other studies examining the
cigarette prevalence between 0.30% and 0.56%. One same outcome [29, 33]. Five out of six included stud-
study examined cigarette cessation and found cigarette ies used primarily cross-sectional data [28–31, 33],
cessation was expected to increase by 0.40% when which may be considered a weakness of the studies;
prices increased by 1%. Thus, youths who are exposed however, most of these used repeated measurements
to increases in cigarette prices are expected to smoke over time which can be considered as an important
less, be less susceptible to start smoking and more sus- strength of the included studies.
ceptible to quit smoking. Moreover, fewer youths are Few of the included studies had investigated older
expected to smoke overall (lower cigarette prevalence). youths’ responsiveness to price changes on cigarettes.
Findings also indicate that youth cigarette consumption Hence, only one study investigated youths up to 27
is relatively more affected by price increases compared years of age, and in that study the group consisting of
with the other outcomes investigated (i.e. cigarette 13–27 year-olds was relatively more price inelastic
prevalence, initiation and cessation). compared with the other groups of youths investigated
The size of effect seemed to vary with age and (13–17 year-olds and 13–22 year-olds, respectively)
gender. Hence, four studies examined the effect of [32]. Hence, future research may focus on examining
price increases in subgroups based on gender youth price elasticity based on and stratified by both
[28, 30, 31, 33]. Findings indicated that female indi- younger and older youths (<30 years of age).
viduals are more price sensitive compared with male Most of the included studies are based on relatively
individuals concerning initiation of cigarette smok- old data; four out of six studies used data before 2010
ing. On the other hand, male individuals seemed to and the remaining two studies used data from
be more price sensitive in relation to consumption of 2012/2013 and from 2001 to 2015, respectively
cigarettes and prevalence of smoking. These results [29, 30]. Moreover, the study utilising the newest data
are in line with findings from a previous meta-analy- (until 2015) was conducted among Chilean youths
sis indicating that women are less sensitive to the [30]. Although Chile is considered a high-income coun-
price changes of cigarettes [34]. However, other try based on its GNI, this country may not be compa-
research from the US found overall no gender differ- rable with Scandinavian countries such as Denmark on
ences concerning the responsiveness to changes in several parameters; for example, national tobacco legis-
cigarette prices [35]. We identified two studies that lation, youth tobacco behaviours, etc. Therefore, newer
examined price elasticity of the demand for ciga- and more country-specific measures are essential for
rettes stratified by age groups, and found youths of understanding youths’ responsiveness to price changes
younger age to be more price sensitive compared on cigarettes.
with older youths in relation to cigarette consump- Although the aim of this review was to examine the
tion and initiation [29, 32]. The present findings are price elasticity of the demand for cigarettes among
in line with previous research [34, 35] and with eco- youths in high-income countries, two studies included
nomic theory stating that younger individuals are data from both developing and developed countries
more affected by price changes due to a relatively and based their calculation of price elasticities on: (a) all
lower disposable income [18]. The two outcomes of countries; and (b) developing countries only [31, 33].
cigarette cessation and prevalence were not studied Thus, the results of these studies may not be generalis-
according to age groups. able to other high-income countries due to the inclu-
sion of developing countries in their overall estimate of
price elasticity. Nonetheless, the estimates of price elas-
Methodological considerations
ticity did not seem to differ markedly between develop-
Overall, we found estimates of price elasticities to vary ing countries and all countries in the estimated models.
between and within the included studies. For example, Moreover, it seems that the estimates of price elasticity
for cigarette initiation, estimates ranged from −0.11 to derived from the included studies are overall in the
−1.13. This may be due to differences in the data and same direction – although with somewhat varying esti-
collection methods used but also because of country- mates in between studies.
specific differences in the youth population investi-
gated in the included studies. For example, one
Implications
included study found that the price elasticity of ciga-
rette consumption was insignificant overall and when The results of this review revealed several implications
stratified by gender [28]. Worth noting is that that for future research as well as for policy and practice.
42    S.G. Kjeld et al.
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ORCID iD [20] SKAT. Afgiften på tobaksvarer stiger fra 1. april 2020 [The tax on
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Simone Gad Kjeld https://orcid.org/0000-0001- dk/skat.aspx?oid=2294846 (accessed 12 September 2021).
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