scholarly journals Differential price responses for tobacco consumption: implications for tax incidence

2022 ◽  
pp. tobaccocontrol-2021-056846
Author(s):  
Guillermo Cruces ◽  
Guillermo Falcone ◽  
Jorge Puig
Keyword(s):  
Income Distribution ◽  
Age Groups ◽  
Cost Effective ◽  
Tobacco Consumption ◽  
Price Elasticities ◽  
Tobacco Taxes ◽  
Household Expenditure Survey ◽  
Tobacco Tax ◽  
Effective Policy ◽  
Demand Price Elasticity

Increasing tobacco taxes is considered the most effective an cost-effective policy to reduce tobacco consumption. However, a common objection to tobacco taxes is that they tend to rely disproportionately on the poorest individuals since less affluent smokers incur proportionately greater expenditures on cigarettes compared with more affluent smokers. Such objections usually assume that all smokers throughout the income distribution react similarly to an increase in tobacco prices. But, if less affluent smokers are more sensitive to price changes (ie, they have a higher demand price elasticity), reductions in tobacco consumption should be higher at the bottom of the income distribution. This paper uses data from Argentina’s Household Expenditure Survey to estimate demand price elasticities for tobacco by income and age groups. Results indicate that less affluent smokers present higher demand price elasticities for cigarettes than more affluent ones. A 10% increase in cigarette prices would decrease consumption by 8.5% (4.4%) for the poorest (richest) smokers. In addition, young people are the most elastic group. These differential elasticities have relevant implications in terms of the distributional incidence of increasing tobacco taxes. As less well-off individuals reduce consumption relatively more, they bear a relatively lower tax burden. Thus, tobacco tax increases may not be regressive as is often believed. As a whole, this paper provides policymakers with relevant arguments for policy discussion and the public debate on common objections to increasing tobacco taxes.

Impact of three annual tobacco tax rises on tobacco sales in remote Australian Aboriginal community stores

2020 ◽  
pp. tobaccocontrol-2020-055865
Author(s):  
David P Thomas ◽  
Emma McMahon ◽  
Zhiqiang Wang ◽  
Michelle M Scollo ◽  
Sarah J Durkin
Keyword(s):  
Interrupted Time Series ◽  
Tobacco Consumption ◽  
Interrupted Time Series Analysis ◽  
Aboriginal Communities ◽  
Tobacco Taxes ◽  
Tobacco Sales ◽  
Tobacco Tax ◽  
Australian Aboriginal Community ◽  
Tobacco Taxation ◽  
First Time

BackgroundThere is strong evidence from many settings that tobacco tax rises which increase prices reduce tobacco consumption, but only limited evidence from Indigenous settings.MethodsWe analysed 3 years (2016–2018) of weekly sales data from 32 stores in remote Aboriginal communities. We used interrupted time series analysis to estimate the immediate impact of the price rice following annual 12.5% tobacco tax rises on sales on (A) stick equivalents of tobacco and (B) fruit and vegetables (kg) per $A1000 of grocery sales, and on the trend in sales between price rises.ResultsWe detected 5.8% and 8.2% immediate declines in tobacco sales following the price rises associated with annual 12.5% tax rises in 2016 and 2018, and a non-significant decline (1.6%) following the 2017 tax rise. Decreased sales were mainly driven by declines in mainstream and premium factory-made cigarettes. Fruit and vegetable sales did not change at the time of tobacco price rises.ConclusionFor the first time, we demonstrated evidence of price-sensitivity and the immediate impact of price rises from tobacco tax rises on tobacco sales in remote Aboriginal communities. We acknowledge that Australia already has very high tobacco taxation and prices, but recommend further increases to the taxation of roll-your-own (RYO) tobacco to prevent smokers and industry using cheaper RYO cigarettes to undermine this impact of high tobacco taxes and prices.

scholarly journals Questioning the regressivity of tobacco taxes: a distributional accounting impact model of increased tobacco taxation

2020 ◽  
pp. tobaccocontrol-2019-055315 ◽  
Author(s):  
Stéphane Verguet ◽  
Patrick K A Kearns ◽  
Vaughan W Rees
Keyword(s):  
Low Income ◽  
Cost Effective ◽  
Income Group ◽  
Cigarette Consumption ◽  
Tax Burden ◽  
Income Share ◽  
Tobacco Taxes ◽  
Tobacco Tax ◽  
Definition Of ◽  
Tobacco Taxation

BackgroundTobacco taxes, as with other ‘sin taxes’, are generally regarded as a highly cost-effective mechanism to reduce consumption but are often considered by policymakers to be regressive, undermining efforts to fully implement them at levels recommended by the WHO due to concerns of fairness. We aim to demonstrate whether there are circumstances in which the impacts of additional tobacco taxes are not regressive, using a standard income-share accounting definition of tax burden.Methods and findingsWe apply mathematical modelling and explore the hypothetical distributions in the net change in tobacco taxes and cigarette expenditures by income group, following an increase in tobacco taxation. The hypothetical distribution per income group of additional taxes and cigarette expenditures borne by individuals following tobacco tax hikes was calculated with respect to a selection of parameters including: the change in the retail price of cigarettes, the price elasticity of demand for tobacco, smoking prevalence, cigarette consumption and individual income. We determine the range of hypothetical parameter values for which increased tobacco taxation should not be considered to penalise the poorest income groups when examining marginal cigarette consumption expenditures and using an accounting definition of tax burden.ConclusionsOur findings question the doctrine that tobacco taxes are uniformly regressive from a standard income-share accounting view and point to the importance of the specific features of tax policy to shape a progressive approach to tobacco taxation: tobacco tax increases are less likely to be regressive when accompanied by a broad framework of demand-side measures that enhance the capacity of low-income smokers to quit tobacco use.

scholarly journals Tobacco price elasticity in Serbia: evidence from a middle-income country with high prevalence and low tobacco prices

2020 ◽  
Vol 29 (Suppl 5) ◽  
pp. s331-s336 ◽  
Author(s):  
Marko Vladisavljevic ◽  
Jovan Zubović ◽  
Mihajlo Đukić ◽  
Olivera Jovanović
Keyword(s):  
Price Elasticity ◽  
Low Income ◽  
Tobacco Consumption ◽  
Reliable Estimate ◽  
Demand Model ◽  
Middle Income ◽  
Middle Income Countries ◽  
Tobacco Taxes ◽  
Tobacco Tax ◽  
High Prevalence

In this paper, we use Deaton’s demand model and Household Budget Survey data from 2006 to 2017 to provide a first robust and reliable estimate of cigarettes price elasticity for Serbia. The case of Serbia is particularly interesting and important as it provides evidence for a country in which tobacco market is characterised by the high tobacco consumption, low prices and large perceived impact of multinational tobacco companies on public revenues, export and employment, given their considerable cigarette production in Serbia. The price elasticity of cigarettes is estimated at −0.639, in line with the previous estimates for the low-income and middle-income countries. Estimated negative cigarettes price elasticity for Serbia suggests that tobacco tax policy could be used effectively to reduce cigarette consumption in Serbia, which could lower the harmful health effects of cigarettes. Furthermore, a calculation based on the estimated elasticity suggests that increasing tobacco taxes could also have positive fiscal effects, as the expected revenue from the taxes would increase.

scholarly journals Impact of a recent tobacco tax reform in Argentina

2020 ◽  
Vol 29 (Suppl 5) ◽  
pp. s300-s303
Author(s):  
Martín González-Rozada
Keyword(s):  
Price Elasticity ◽  
Tax Reform ◽  
Cost Effective ◽  
Cigarette Consumption ◽  
Price And Income Elasticities ◽  
Tobacco Tax ◽  
Short Run ◽  
The Government ◽  
Demand Price Elasticity ◽  
The Impact

The literature on policies for the control of the tobacco epidemic suggests that increasing excise taxes on the consumption of tobacco products is the most cost-effective policy. Cigarette tax structure in Argentina is very complex. All the tax bases for cigarette consumption taxes are related and, therefore, any modification of a tax affects the collection of the rest of the taxes. This is important given that funds raised by one of the taxes, the Special Tobacco Fund (FET), are allocated among the tobacco provinces according to the value of tobacco production. These provinces oppose in the congress to any reform that increase taxes on cigarette consumption that negatively affects these funds. In May 2016, the government decided to increase the rate of one of the taxes, the internal tax, from 60% to 75%. We study the impact on cigarettes’ demand price elasticity, consumption and tax revenues of this tobacco tax reform. Using an Error Correction Model, we estimate short-run and long-run demand price and income elasticities. We find that the tax reform of May 2016 induced an increase in the magnitude, in absolute value, of the short-run demand price elasticity and at the same time increased the funds collected by the FET. We simulate the effects of the tax reform over the government revenues and per-capita consumption of cigarettes showing that additional increments in taxes would increase revenues and diminish consumption of cigarettes.

scholarly journals Illicit tobacco trade in Georgia: prevalence and perceptions

2019 ◽  
Vol 29 (Suppl 4) ◽  
pp. s227-s233 ◽  
Author(s):  
Megan Little ◽  
Hana Ross ◽  
George Bakhturidze ◽  
Iago Kachkachishvili
Keyword(s):  
Low Income ◽  
Household Survey ◽  
Tobacco Consumption ◽  
Middle Income ◽  
Middle Income Countries ◽  
Tobacco Taxes ◽  
Tobacco Tax ◽  
Illicit Tobacco Trade ◽  
Multistage Sampling ◽  
Cigarette Packs

BackgroundIn lower-income and middle-income countries, limited research exists on illicit tobacco trade and its responsiveness to taxation. Tobacco taxes are critical in reducing tobacco consumption, thereby improving public health. However, the tobacco industry claims that tax increases will increase illicit tobacco trade. Therefore, research evidence on the size of the illicit cigarette market is needed in Georgia and other low-income and middle-income countries to inform tobacco tax policies.MethodsIn 2017, a household survey using stratified multistage sampling was conducted in Georgia with 2997 smokers, to assess illicit tobacco consumption. Smokers were asked to show available cigarette packs to the surveyors. These were examined for tax stamps and health warnings which allowed for an assessment of illegal cigarette consumption in Georgia.FindingsThe packs shown to surveyors suggest illicit cigarette trade is low (1.5%), although with regional differences, as illicit cigarette packs were present in 6% of the households in Zugdidi. Most illicit cigarettes were purchased at kiosks or informal outlets. This estimate might be conservative, as 28% of respondents did not show any packs to the surveyors.ConclusionsDespite recent tobacco tax increases, illicit cigarette trade in Georgia seems to be negligible. The market is more vulnerable to illicit cigarette trade close to the border with Abkhazia (near Zugdidi). Tighter control or ban of tobacco sales at kiosks and informal outlets may reduce illicit cigarette trade. Further investigation is planned to better understand why a large proportion of survey participants said they had no pack available at home.

Basic economic gap related to smoking: reconciling tobacco tax receipts and economic costs of smoking-attributable diseases

2018 ◽  
Vol 28 (5) ◽  
pp. 558-561 ◽  
Author(s):  
Petr David
Keyword(s):  
Health Risks ◽  
Input Data ◽  
Health Expenditures ◽  
Tobacco Consumption ◽  
Tax Rates ◽  
Economic Costs ◽  
Tobacco Taxes ◽  
Tobacco Tax ◽  
The Usa ◽  
The Difference

BackgroundTobacco tax rates set by various governments are not based on the idea that tax receipts should cover the costs incurred by smoking. It can be assumed that tobacco tax receipts (TTR) differ from the costs of smoking. The aim is to determine the global basic economic gap (BEG) between TTR and the economic costs of smoking-attributable diseases (ECS).MethodsBEG is described as the difference between the ECS and TTR. A total of 124 countries representing 94% of global tobacco consumption were included in the research by means of the creation of a database, the adjustment of input data and the identification of their intersection.ResultsThe global BEG reaches US$1438 billion per year. The global ECS are US$1911 billion per year. The global TTR are US$473 billion per year and compensate for only one quarter of the ECS. Within countries with the highest consumption of cigarettes, especially the USA but also Russia and Germany, the proportion of the ECS covered by the TTR is even lower, although private health expenditures have been taken into account.ConclusionsOur findings suggest that tobacco taxes would have to be globally increased by more than four times on average in order to cover the ECS or between two and two-and-a-half times if we take private health expenditures into account. The informational pressure concerning health risks associated with smoking aimed at reducing harmful consumption and improving global health can also be supported with these economic facts.

Assessing policies to mitigate abandonment of shade-grown coffee production in forest systems amid low and uncertain prices

2020 ◽  
pp. 1-26
Author(s):  
Heidi J. Albers ◽  
Stephanie Brockmann ◽  
Beatriz Ávalos-Sartorio
Keyword(s):  
Ecosystem Services ◽  
Low Cost ◽  
Cost Effective ◽  
Biodiversity Hotspot ◽  
Payments For Ecosystem Services ◽  
Natural Forests ◽  
Coffee Production ◽  
Certification Programs ◽  
Coffee Farmers ◽  
Effective Policy

Abstract Low and highly variable prices plague the coffee market, generating concerns that coffee farmers producing in shade systems under natural forests, as in biodiversity hotspot Oaxaca, Mexico, will abandon production and contribute to deforestation and reduced ecosystem services. Using stakeholder information, we build a setting-informed model to analyze farmers' decisions to abandon shade-grown coffee production and their reactions to policy to reduce abandonment. Exploring price premiums for bird-friendly certified coffee, payments for ecosystem services, and price floors as policies, we find that once a farmer is on the path toward abandonment, it is difficult to reverse. However, implementing policies early that are low cost to farmers – price floors and no-cost certification programs – can stem abandonment. Considering the abandonment that policy avoids per dollar spent, price floors are the most cost-effective policy, yet governments prefer certification programs that push costs onto international coffee consumers who pay the price premium.

scholarly journals Ethnic Specific body fat percent prediction equation as surrogate marker of obesity in Ethiopian adults

2021 ◽  
Vol 40 (1) ◽  
Author(s):  
Makeda Sinaga ◽  
Melese Sinaga Teshome ◽  
Tilhun Yemane ◽  
Elsah Tegene ◽  
David Lindtsrom ◽  
...  
Keyword(s):  
Body Fat ◽  
Age Groups ◽  
Surrogate Marker ◽  
Cost Effective ◽  
Prediction Equation ◽  
Prediction Equations ◽  
Altman Plot ◽  
Cross Sectional ◽  
Bland Altman Plot ◽  
Body Fat Percent

Abstract Background Application of advanced body composition measurement methods is not practical in developing countries context due to cost and unavailability of facilities. This study generated ethnic specific body fat percent prediction equation for Ethiopian adults using appropriate data. Methods A cross-sectional study was carried ifrom February to April 2015 among 704 randomly selected adult employees of Jimma University. Ethnic specific Ethiopian body fat percent (BF%) prediction equation was developed using a multivariable linear regression model with measured BF% as dependent variable and age, sex, and body mass index as predictor variables. Agreement between fat percent measured using air displacement plethysmography and body fat percent estimated using Caucasian prediction equations was determined using Bland Altman plot. Results Comparison of ADP measured and predicted BF% showed that Caucasian prediction equation underestimated body fat percent among Ethiopian adults by 6.78% (P < 0.0001). This finding is consistent across all age groups and ethnicities in both sexes. Bland Altman plot did not show agreement between ADP and Caucasian prediction equation (mean difference = 6.7825) and some of the points are outside 95% confidence interval. The caucasian prediction equation significantly underestimates body fat percent in Ethiopian adults, which is consistent across all ethnic groups in the sample. The study developed Ethnic specific BF% prediction equations for Ethiopian adults. Conclusion The Caucasian prediction equation significantly underestimates body fat percent among Ethiopian adults regardless of ethnicity. Ethiopian ethnic-specific prediction equation can be used as a very simple, cheap, and cost-effective alternative for estimating body fat percent among Ethiopian adults for health care provision in the prevention of obesity and related morbidities and for research purposes.

scholarly journals To Trade or Not To Trade? Criteria for Applying Cap and Trade

2001 ◽  
Vol 1 ◽  
pp. 953-957 ◽  
Author(s):  
Stephanie Benkovic ◽  
Joseph Kruger
Keyword(s):  
Emissions Trading ◽  
Environmental Problem ◽  
Cost Effective ◽  
Cap And Trade ◽  
Policy Tool ◽  
Effective Manner ◽  
Effective Policy ◽  
Foreign Governments ◽  
Trading Program ◽  
The U.S

The use of emissions trading (cap and trade) is gaining worldwide recognition as an extremely effective policy tool. The U.S. Sulfur Dioxide (SO2) Emissions Trading Program has achieved an unprecedented level of environmental protection in a cost-effective manner. The successful results of the program have led domestic and foreign governments to consider the application of cap and trade to address other air quality issues. Certain analyses are particularly important in determining whether or not cap and trade is an appropriate policy tool. This paper offers a set of questions that can be used as criteria for determining whether or not cap and trade is the preferred policy approach to an environmental problem.

scholarly journals How effective and cost-effective is water fluoridation for adults? Protocol for a 10-year retrospective cohort study

BDJ Open ◽  
2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Deborah Moore ◽  
Thomas Allen ◽  
Stephen Birch ◽  
Martin Tickle ◽  
Tanya Walsh ◽  
...  
Keyword(s):  
Cohort Study ◽  
Cost Effectiveness ◽  
Retrospective Cohort Study ◽  
Retrospective Cohort ◽  
Dental Treatment ◽  
Age Groups ◽  
Cost Effective ◽  
Tooth Decay ◽  
Service Utilisation ◽  
Water Fluoridation

Abstract Background Tooth decay can cause pain, sleepless nights and loss of productive workdays. Fluoridation of drinking water was identified in the 1940s as a cost-effective method of prevention. In the mid-1970s, fluoride toothpastes became widely available. Since then, in high-income countries the prevalence of tooth decay in children has reduced whilst natural tooth retention in older age groups has increased. Most water fluoridation research was carried out before these dramatic changes in fluoride availability and oral health. Furthermore, there is a paucity of evidence in adults. The aim of this study is to assess the clinical and cost-effectiveness of water fluoridation in preventing invasive dental treatment in adults and adolescents aged over 12. Methods/design Retrospective cohort study using 10 years of routinely available dental treatment data. Individuals exposed to water fluoridation will be identified by sampled water fluoride concentration linked to place of residence. Outcomes will be based on the number of invasive dental treatments received per participant (fillings, extractions, root canal treatments). A generalised linear model with clustering by local authority area will be used for analysis. The model will include area level propensity scores and individual-level covariates. The economic evaluation will focus on (1) cost-effectiveness as assessed by the water fluoridation mean cost per invasive treatment avoided and (2) a return on investment from the public sector perspective, capturing the change in cost of dental service utilisation resulting from investment in water fluoridation. Discussions There is a well-recognised need for contemporary evidence regarding the effectiveness and cost-effectiveness of water fluoridation, particularly for adults. The absence of such evidence for all age groups may lead to an underestimation of the potential benefits of a population-wide, rather than targeted, fluoride delivery programme. This study will utilise a pragmatic design to address the information needs of policy makers in a timely manner.

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