The objective of this paper is to figure out the desirable way of cigarettetaxation by investigating the effect of discontinuous increase in cigarette tax onsmoking reduction. We use a monthly data for cigarette consumption toestimate the cigarette demand function by employing explanatory variablessuch as cigarette price, income and non-tax regulation. We consider thepossible difference in the price elasticities of cigarette consumption between theperiods of with and without sudden price shock in the estimation. We alsoconsider the short-term consumption adjustments before and after a suddenincrease in cigarette price through tax increase. It is shown that there is nodifference between the effect of a sudden tax increase and that of a gradual andcontinuous tax increase on cigarette consumption. Especially, the price shockof a sudden tax increase on cigarette consumption disappears in a shortperiod. The results imply that a gradual and continuous increase of thecigarette tax at an appropriate rate is a good alternative for the cigarette pricingpolicy to avoid various costs of sudden tax increase and to reduce smoking.