scholarly journals Inequality-Reducing Effects of Tobacco Tax Increase: Accounting for Behavioral Response of Low-, Middle-, and High-Income Households in Serbia

2021 ◽  
Vol 18 (18) ◽  
pp. 9494
Author(s):  
Marko Vladisavljević ◽  
Jovan Zubović ◽  
Mihajlo Đukić ◽  
Olivera Jovanović
Keyword(s):  
Low Income ◽  
Behavioral Response ◽  
Tobacco Consumption ◽  
High Income ◽  
Tax Burden ◽  
Household Expenditures ◽  
Income Groups ◽  
Tobacco Tax ◽  
Positive Effect ◽  
Low Income Households

While previous research has indicated that increasing tobacco excises is a crucial instrument for lowering tobacco demand, this policy has been criticized for its alleged regressive impact on the poor. However, this critique does not take into account the behavioral response, i.e., decrease in consumption that occurs after excises and prices increase. In this paper, we examine the effect of cigarettes’ price increase on tobacco consumption, household expenditures, and tax burdens in three income groups and provide empirical arguments on the regressivity/progressivity effects of tobacco tax increase. Estimated elasticities indicate that all groups decrease their cigarettes demand with increasing prices, with demand decrease stronger for low- than for middle- and high-income households. Results further suggest that increasing tobacco excises (1) decreases tobacco expenditure of low-income households, which increases their productive consumption, such as on food, clothes, etc., and (2) redistributes the tobacco tax burden from low- to high-income households. Therefore, excise increase policies do not have an adverse effect on the position of the low-income households; on the contrary, they lower their cigarettes expenditure and their tax burden, while lower cigarettes consumption has an additional, positive effect on their health, which attenuates future inequalities.

Crowding-out effect of tobacco expenditure in Vietnam

2020 ◽  
Vol 29 (Suppl 5) ◽  
pp. s326-s330
Author(s):  
Ngoc-Minh Nguyen ◽  
Anh Nguyen
Keyword(s):  
Low Income ◽  
Socioeconomic Development ◽  
Wald Test ◽  
Tobacco Consumption ◽  
Living Standard ◽  
Household Expenditure ◽  
Crowding Out ◽  
Tobacco Tax ◽  
The Difference ◽  
Low Income Households

PurposeThis study aims at analysing the causal crowding-out effect of tobacco spending on intrahousehold budget share in Vietnam. Besides, we also examine the differences in expenditure patterns between tobacco spending households and non-spending households in Vietnam as well as determine the reason behind these differences.MethodsWe estimated a system of quadratic conditional Engel curve to determine intrahousehold resource allocation using the latest Vietnam Household Living Standard Survey data in 2016. In order to estimate the causal crowding-out effect of tobacco spending, GMM 3SLS method is used to simultaneously deal with heteroscedasticity and endogeneity problems.ResultsAlthough the Wald test results propose the difference in preferences between tobacco spending and non-spending households in Vietnam, once controlling for household characteristics, the results from GMM 3SLS method show that the differences are insignificant. Generally, the crowding-out effect of tobacco spending in Vietnamese households is modest because of the small share of tobacco in the total household expenditure. An increase in tobacco expenditure only leads to a fall in the budget shares of education. The crowding-out effect, however, mainly appears in the case of low-income households.ConclusionsThe reduction in education caused by tobacco consumption, particularly in low-income households, may extend inequality and thus prevent the socioeconomic development in Vietnam in the long term. Additionally, the tiny share of tobacco in household expenditure reveals that the price of tobacco products in Vietnam is extremely low, leading to high proportion of tobacco smokers. Government, therefore, should continuously increase the tobacco tax so that it could restrict the tobacco affordability.

The heterogeneous impact of a successful tobacco control campaign: a case study of Mauritius

2017 ◽  
Vol 27 (1) ◽  
pp. 83-89 ◽  
Author(s):  
Hana Ross ◽  
Leelmanee Moussa ◽  
Tom Harris ◽  
Rajive Ajodhea
Keyword(s):  
Tobacco Control ◽  
Tobacco Use ◽  
Low Income ◽  
Tobacco Consumption ◽  
Control Measures ◽  
Control Policies ◽  
Tobacco Control Policies ◽  
Tobacco Tax ◽  
The Impact ◽  
Low Income Households

BackgroundMauritius has one of the highest smoking prevalences in Africa, contributing to its high burden of non-communicable diseases. Mauritius implemented a series of tobacco control measures from 2009 to 2012, including tobacco tax increases. There is evidence that these policies reduced tobacco consumption, but it is not clear what impact they had across different socioeconomic groups.MethodThe impact of tobacco control measures on different income groups was analysed by contrasting household tobacco expenditures reported in 2006–2007 and 2012 household expenditure surveys. We employed the seemingly unrelated regression model to assess the impact of tobacco use on other household expenditures and calculated Gini coefficients to assess tobacco expenditure inequality.ResultsFrom 2006 to 2012, excise taxes and retail cigarette prices increased by 40.6% and 15.3% in real terms, respectively. These increases were accompanied by numerous non-price tobacco control measures. The share of tobacco-consuming households declined from 35.7% to 29.3%, with the largest relative drop among low-income households. The Gini coefficient of household tobacco expenditures increased by 10.4% due to decreased spending by low-income households. Low-income households demonstrated the largest fall in their tobacco budget shares, and the impact of tobacco consumption on poverty decreased by 26.2%. Households that continued purchasing tobacco reduced their expenditures on transportation, communication, health, and education.ConclusionsThese results suggest that tobacco control policies, including sizeable tax increases, were progressive in their impact. We conclude that tobacco use increases poverty and inequality, but stronger tobacco control policies can mitigate the impact of tobacco use on impoverishment.

The Geographic Spread of a Large Devaluation

2018 ◽  
Vol 108 ◽  
pp. 562-566 ◽  
Author(s):  
Javier Cravino ◽  
Andrei A. Levchenko
Keyword(s):  
Low Income ◽  
Regional Variation ◽  
High Income ◽  
The Poor ◽  
Geographic Spread ◽  
Mexican Peso ◽  
Low Income Households

Cravino and Levchenko (2017) establish that the 1994 Mexican peso devaluation raised the prices of consumption baskets of low-income households substantially more than the prices of the consumption baskets of high-income households. In this paper, we explore this result further by focusing on the regional variation in how much prices of consumption baskets changed following the devaluation. Our main finding is that the devaluation was anti-poor in all regions, but there is substantial regional dispersion in the relative inflation faced by the poor.

scholarly journals Inequity under Equality: Research on the Benefits Equity of Chinese Basic Medical Insurance

2020 ◽  
Author(s):  
Li Diao ◽  
Yiwei Liu
Keyword(s):  
Health Care ◽  
Low Income ◽  
Choice Model ◽  
Empirical Test ◽  
Medical Insurance ◽  
High Income ◽  
Mechanism Analysis ◽  
Basic Medical Insurance ◽  
Income Groups ◽  
Basic Medical

Abstract Background: The pursuit of equity is one of the basic principles behind the strengthening of health care reform. China's new rural cooperative medical insurance (NRCMI) and urban residents' basic medical insurance (URBMI) are both “equalized” in terms of fundraising and reimbursement. This paper studies the benefits equity under this "equalized" system.Methods: The data analysed in this paper are from the China Family Panel Studies (CFPS) from 2014 to 2016, implemented by the Institute of Social Science Survey at Peking University. A two-part model and a binary choice model are used in the empirical test.Results: The empirical test revealed that high-income people benefit more from basic medical insurance than low-income people. Mechanism analysis demonstrated that high-income people have higher medical insurance applicability and can utilize better health care. Since low-income people are unhealthier, inequity in benefits exacerbates health inequity. We also found that the benefits equity of URBMI is better than that of NRCMI.Conclusions: The government needs to pay more attention to the issue of medical insurance inequity. We should consider allowing different income groups to pay different premiums according to their medical expenses or applying different reimbursement policies for different income groups.

The Mode Choice of the Residents in Suburban Area

2014 ◽  
Vol 1030-1032 ◽  
pp. 2459-2462
Author(s):  
Hang Luo ◽  
Yun Hong Shao ◽  
Bi Jie Ding ◽  
Shu Yue Wu
Keyword(s):  
Low Income ◽  
Public Transportation ◽  
Structural Equation ◽  
Mode Selection ◽  
Land Development ◽  
High Income ◽  
Suburban Area ◽  
Equation Modeling ◽  
Income Groups ◽  
Low Income Groups

In recent years, with the expansion of urban space in China, large-scale land development and commodity residential construction lead to urban land expanding continuously, the residents especially low-income groups in suburban area face more problems, such as commuting costs increase, transportation accessibility reduce. The purpose of this paper is to compare and analyze the travel choices between high-income and low-income residents in suburban area, using the structural equation modeling to analyze how the social and economic attributes, public transport accessibility and commuting time influence on traffic mode selection, and contribute to public transportation development for low-income group in suburban area. The result of the research shows influence of different factors involving the traffic mode selection between low-income groups and high-income groups.

scholarly journals Price, Income, and Affordability as the Determinants of Tobacco Consumption: A Practitioner’s Guide to Tobacco Taxation

2020 ◽  
Author(s):  
Nigar Nargis ◽  
Michal Stoklosa ◽  
Ce Shang ◽  
Jeffrey Drope
Keyword(s):  
Price Elasticity ◽  
Tobacco Consumption ◽  
High Income ◽  
Cigarette Consumption ◽  
Tobacco Products ◽  
Middle Income ◽  
Middle Income Countries ◽  
Price Increases ◽  
Tobacco Tax ◽  
Tobacco Taxation

Abstract Introduction Tobacco product prices and consumers’ income are the two major economic determinants of tobacco demand. The affordability of tobacco products is dependent on the price of tobacco products relative to consumer income. Increase in tobacco tax is expected to lead to higher price, lower affordability, and reduced consumption. Price elasticity and affordability elasticity are used in analyzing the effect of tobacco tax increases on tobacco consumption and public health. The availability of both parameters raises the question of which one to apply in policy discussions. Aims and Methods Using global data on cigarette consumption, price, income, and tobacco control measures for 169 countries over 2007–2016, this study estimated the price elasticity and affordability elasticity of cigarette consumption by country income classification using country-specific fixed effects model for panel data. Results The estimates show that the restriction of equal strength of the effects of price and income changes on tobacco consumption maintained in affordability elasticity estimation is valid for low- and middle-income countries, while it is rejected for high-income countries. Conclusions Affordability elasticity may prove to be a useful parameter to explain and predict the sensitivity of consumers to tobacco tax and price policy changes under conditions of robust economic growth, which are more likely to be observed in countries with initial low- or middle-income setting. It can provide a reasonable benchmark for tobacco tax and price increase necessary to effectively reduce affordability and consumption of tobacco, which can form a basis for building systematic tax and price increases into the tobacco tax policy mechanism. Implications Price elasticity measures the sensitivity of consumers to changes in real prices, holding real income constant. Affordability elasticity measures the sensitivity of consumers to price changes adjusted for inflation and income changes. Existing scientific literature on tobacco demand abounds in both price and affordability elasticity estimates, without providing a clear explanation of the theoretical and policy implications of using one parameter over the other. By estimating and comparing price and affordability elasticities for high-income and low-and-middle-income countries separately, this article offers a guide to the practitioners in tobacco taxation for evaluating the effectiveness of tax-induced price increases on tobacco consumption.

Impact of Market-Rate Residential Parking Permit Fees on Low-Income Households

2019 ◽  
Vol 2673 (12) ◽  
pp. 644-654
Author(s):  
Alex Okashita ◽  
Richard Willson
Keyword(s):  
Los Angeles ◽  
Low Income ◽  
Consumer Expenditure ◽  
Income Class ◽  
Consumer Expenditure Survey ◽  
Market Rate ◽  
Income Groups ◽  
Transportation Modes ◽  
Residential Parking ◽  
Low Income Households

On-street parking is a poorly-managed public asset. In dense neighborhoods, this results in difficult space searches, neighborhood conflict, and opposition to housing development. Market-rate residential parking permit systems are a logical solution because they manage demand. However, these programs are regressive for low-income residents who buy a permit because the permit fee is a larger percentage of their income than for higher-income groups. This paper reports on a simulation of the burden of a market-based fee on households of different income classes using three low-income neighborhoods in Los Angeles, California. Data from the American Community Survey, Consumer Expenditure Survey, and primary parking counts are the model inputs. The outputs are measures of the increase in a household’s annual transportation expenditure, by income class, after a market-rate permit fee is implemented. The results show that market-rate programs are indeed regressive for households that purchase a permit. But because many low-income households do not have a car, do not park on-street, or pursue alternative options to buying a permit, the magnitude of the effect of income class is not as large as is often assumed. The study concludes that the regressive effect of a market-rate residential parking benefit district should not be an impediment to implementing such a scheme because low-income permit purchasers can be subsidized with permit revenue from higher-income drivers in the district, resources from higher-income parking districts, or both. Additionally, revenues can be used to support transportation modes that particularly benefit all low-income residents.

scholarly journals Income-based inequalities in self-reported moderate-to-vigorous physical activity among adolescents in England and the United States: a cross-sectional study

2020 ◽  
Author(s):  
Shaun Scholes ◽  
Jennifer S Mindell
Keyword(s):  
Physical Activity ◽  
Low Income ◽  
Vigorous Physical Activity ◽  
The United States ◽  
Cross Sectional Study ◽  
High Income ◽  
Sectional Study ◽  
Cross Sectional ◽  
The Us ◽  
Low Income Households

Objective: Quantify inequalities in self-reported moderate-to-vigorous physical activity (MVPA) in England and the United States (US). Design: Population-based cross-sectional study. Participants: 4019 adolescents aged 11-15 years in England (Health Survey for England 2008, 2012, 2015) and 4312 aged 12-17 years in the US (National Health and Nutrition Examination Survey 2007-16). Main outcome measures: Three aspects of MVPA: (1) doing any, (2) average min/day (MVPA: including those who did none), and (3) average min/day conditional on participation (MVPA-active). Using hurdle models, we quantified inequalities (average marginal effects: AMEs) using the absolute difference in marginal means. Results: In England, adolescents in high-income households were more likely than those in low-income households to have done any formal sports/exercise in the last seven days (boys: 11%; 95% CI: 4% to 17%; girls: 13%; 95% CI: 6% to 20%); girls in high-income households did more than their low-income counterparts (MVPA: 6 min/day, 95% CI: 2 to 9). Girls in low-income households spent more time in informal activities than girls in high-income households (MVPA: 21 min/day; 95% CI: 10 to 33), whilst boys in low-income versus high-income households spent longer in active travel (MVPA: 21 min/week; 95% CI: 8 to 34). In the US, in a typical week, recreational activity was greater among high-income versus low-income households (boys: 15 min/day; 95% CI: 6 to 24 min/day; girls: 19 min/day; 95% CI: 12 to 27). In contrast, adolescents in low-income versus high-income households were more likely to travel actively (boys: 11%; 95% CI: 3% to 19%; girls: 10%; 95% CI: 3% to 17%) and do more. Conclusions: Policy actions and interventions are required to increase MVPA across all income groups in England and the US. Differences in formal sports/exercise (England) and recreational (US) activities suggest that additional efforts are required to reduce inequalities.

scholarly journals Inequity under Equality: Research on the Benefits Equity of Chinese Basic Medical Insurance

2020 ◽  
Author(s):  
Li Diao ◽  
Yiwei Liu
Keyword(s):  
Health Care ◽  
Low Income ◽  
Choice Model ◽  
Empirical Test ◽  
Medical Insurance ◽  
High Income ◽  
Mechanism Analysis ◽  
Basic Medical Insurance ◽  
Income Groups ◽  
Basic Medical

Abstract Background: The pursuit of equity is one of the basic principles behind the strengthening of health care reform. China's new rural cooperative medical insurance (NRCMI) and urban residents' basic medical insurance (URBMI) are both “equalized” in terms of fundraising and reimbursement. This paper studies the benefits equity under this "equalized" system.Methods: The data analysed in this paper are from the China Family Panel Studies (CFPS) from 2014 to 2016, implemented by the Institute of Social Science Survey at Peking University. A two-part model and a binary choice model are used in the empirical test.Results: The empirical test revealed that high-income people benefit more from basic medical insurance than low-income people. Mechanism analysis demonstrated that high-income people have higher medical insurance applicability and can utilize better health care. Since low-income people are unhealthier, inequity in benefits exacerbates health inequity. We also found that the benefits equity of URBMI is better than that of NRCMI.Conclusions: The government needs to pay more attention to the issue of medical insurance inequity. We should consider allowing different income groups to pay different premiums according to their medical expenses or applying different reimbursement policies for different income groups.

scholarly journals Political tax cycles: Cyclicality of the tax burden in election periods

2021 ◽  
Vol 7 (2) ◽  
pp. 193-205
Author(s):  
K. V. Rudy ◽  
◽  
Keyword(s):  
Low Income ◽  
Political Development ◽  
Developed Countries ◽  
High Income ◽  
Political Regime ◽  
Annual Data ◽  
Tax Burden ◽  
Political Systems ◽  
Factor Regression ◽  
Similar Dynamic

The article discusses changes in the tax burden in election and post-election years in countries with different levels of economic and political development. The study uses the data on 121 countries for the period between 1991 and 2019 to test two hypotheses: 1) in election years, governments tend to boost spending while in post-election years government expenditures decline, which determines a similar dynamic of the tax burden; 2) in election years the tax burden decreases and in post-election years it either increases or decreases at a slower rate than in election periods. Methodologically, the study relies on multi-factor regression analysis of panel data. As a result, the first hypothesis is confirmed for high-income countries where the governments increase their spending to ensure the incumbent’s re-election and cut their expenditures after the election. In developed countries, in election years, the government’s spending was 0.4% higher than in other periods. In developed countries, governments were motivated to raise rather than reduce the tax burden in order to compensate for their increased expenditures. No common pattern of declining tax burden in election periods was detected for all observed countries, for groups of countries by income level (high-income, middle- or low-income) or for groups of countries by political regime type (democratic and non-democratic– hybrid or authoritarian). However, the analysis of the annual data on taxes has shown that the decline in the tax burden can occur in countries with developing economic and political systems as was the case with Armenia, Russia and Ukraine in 1992–2019. In general, the findings demonstrate that the governments are more prone to using monetary and fiscal rather than tax instruments in election periods.

Sign in / Sign up

Export Citation Format

Share Document