Raising cigarette excise tax to reduce consumption in low-and middle-income countries of the Asia-Pacific region:a simulation of the anticipated health and taxation revenues impacts 14 Economics 1402 Applied Economics 14 Economics 1403 Econometrics 11 Medical and Health Sciences 1117 Public Health and Health Services

Li Ming Ho, Christian Schafferer, Jie Min Lee, Chun Yuan Yeh, Chi Jung Hsieh

Research output: Contribution to journalArticle

Abstract

Background: According to the World Health Organization (WHO), 80% of the world's smokers live in low- and middle-income countries. Moreover, more than half of the world's smoking-addicted population resides in the Asia-Pacific region. The reduction of tobacco consumption has thus become one of the major social policies in the region. This study investigates the effects of price increases on cigarette consumption, tobacco tax revenues and reduction in smoking-caused mortality in 22 low-income as well as middle-income countries in the Asia-Pacific region. Methods: Using panel data from the 1999-2015 Euromonitor International, the World Bank and the World Health Organization, we applied fixed effects regression models of panel data to estimate the elasticity of cigarette prices and to simulate the effect of price fluctuations. Results: Cigarette price elasticity was the highest for countries with a per capita Gross National Income (GNI) above US$6000 (China and Malaysia), and considerably higher for other economies in the region. The administered simulation shows that with an average annual cigarette price increase of 9.51%, the average annual cigarette consumption would decrease by 3.56%, and the average annual tobacco tax revenue would increase by 16.20%. The number of averted smoking-attributable deaths (SADs) would be the highest in China, followed by Indonesia and India. In total, over 17.96 million lives could be saved by tax increases. Conclusion: Excise tax increases have a significant effect on the reduction of smoking prevalence and the number of averted smoking-attributable deaths. Middle- and upper-middle income countries would be most affected by high-taxation policies.

Original languageEnglish
Article number1187
JournalBMC Public Health
Volume18
Issue number1
DOIs
Publication statusPublished - 2018 Oct 19

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Taxes
Tobacco Products
Health Services
Public Health
Smoking
Economics
Health
Elasticity
Tobacco Use
China
Indonesia
United Nations
Malaysia
Public Policy
Tobacco
India
Mortality
Population

All Science Journal Classification (ASJC) codes

  • Public Health, Environmental and Occupational Health

Cite this

@article{69f63254b1d74547a633231b0fa63709,
title = "Raising cigarette excise tax to reduce consumption in low-and middle-income countries of the Asia-Pacific region:a simulation of the anticipated health and taxation revenues impacts 14 Economics 1402 Applied Economics 14 Economics 1403 Econometrics 11 Medical and Health Sciences 1117 Public Health and Health Services",
abstract = "Background: According to the World Health Organization (WHO), 80{\%} of the world's smokers live in low- and middle-income countries. Moreover, more than half of the world's smoking-addicted population resides in the Asia-Pacific region. The reduction of tobacco consumption has thus become one of the major social policies in the region. This study investigates the effects of price increases on cigarette consumption, tobacco tax revenues and reduction in smoking-caused mortality in 22 low-income as well as middle-income countries in the Asia-Pacific region. Methods: Using panel data from the 1999-2015 Euromonitor International, the World Bank and the World Health Organization, we applied fixed effects regression models of panel data to estimate the elasticity of cigarette prices and to simulate the effect of price fluctuations. Results: Cigarette price elasticity was the highest for countries with a per capita Gross National Income (GNI) above US$6000 (China and Malaysia), and considerably higher for other economies in the region. The administered simulation shows that with an average annual cigarette price increase of 9.51{\%}, the average annual cigarette consumption would decrease by 3.56{\%}, and the average annual tobacco tax revenue would increase by 16.20{\%}. The number of averted smoking-attributable deaths (SADs) would be the highest in China, followed by Indonesia and India. In total, over 17.96 million lives could be saved by tax increases. Conclusion: Excise tax increases have a significant effect on the reduction of smoking prevalence and the number of averted smoking-attributable deaths. Middle- and upper-middle income countries would be most affected by high-taxation policies.",
author = "Ho, {Li Ming} and Christian Schafferer and Lee, {Jie Min} and Yeh, {Chun Yuan} and Hsieh, {Chi Jung}",
year = "2018",
month = "10",
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doi = "10.1186/s12889-018-6096-z",
language = "English",
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T1 - Raising cigarette excise tax to reduce consumption in low-and middle-income countries of the Asia-Pacific region:a simulation of the anticipated health and taxation revenues impacts 14 Economics 1402 Applied Economics 14 Economics 1403 Econometrics 11 Medical and Health Sciences 1117 Public Health and Health Services

AU - Ho, Li Ming

AU - Schafferer, Christian

AU - Lee, Jie Min

AU - Yeh, Chun Yuan

AU - Hsieh, Chi Jung

PY - 2018/10/19

Y1 - 2018/10/19

N2 - Background: According to the World Health Organization (WHO), 80% of the world's smokers live in low- and middle-income countries. Moreover, more than half of the world's smoking-addicted population resides in the Asia-Pacific region. The reduction of tobacco consumption has thus become one of the major social policies in the region. This study investigates the effects of price increases on cigarette consumption, tobacco tax revenues and reduction in smoking-caused mortality in 22 low-income as well as middle-income countries in the Asia-Pacific region. Methods: Using panel data from the 1999-2015 Euromonitor International, the World Bank and the World Health Organization, we applied fixed effects regression models of panel data to estimate the elasticity of cigarette prices and to simulate the effect of price fluctuations. Results: Cigarette price elasticity was the highest for countries with a per capita Gross National Income (GNI) above US$6000 (China and Malaysia), and considerably higher for other economies in the region. The administered simulation shows that with an average annual cigarette price increase of 9.51%, the average annual cigarette consumption would decrease by 3.56%, and the average annual tobacco tax revenue would increase by 16.20%. The number of averted smoking-attributable deaths (SADs) would be the highest in China, followed by Indonesia and India. In total, over 17.96 million lives could be saved by tax increases. Conclusion: Excise tax increases have a significant effect on the reduction of smoking prevalence and the number of averted smoking-attributable deaths. Middle- and upper-middle income countries would be most affected by high-taxation policies.

AB - Background: According to the World Health Organization (WHO), 80% of the world's smokers live in low- and middle-income countries. Moreover, more than half of the world's smoking-addicted population resides in the Asia-Pacific region. The reduction of tobacco consumption has thus become one of the major social policies in the region. This study investigates the effects of price increases on cigarette consumption, tobacco tax revenues and reduction in smoking-caused mortality in 22 low-income as well as middle-income countries in the Asia-Pacific region. Methods: Using panel data from the 1999-2015 Euromonitor International, the World Bank and the World Health Organization, we applied fixed effects regression models of panel data to estimate the elasticity of cigarette prices and to simulate the effect of price fluctuations. Results: Cigarette price elasticity was the highest for countries with a per capita Gross National Income (GNI) above US$6000 (China and Malaysia), and considerably higher for other economies in the region. The administered simulation shows that with an average annual cigarette price increase of 9.51%, the average annual cigarette consumption would decrease by 3.56%, and the average annual tobacco tax revenue would increase by 16.20%. The number of averted smoking-attributable deaths (SADs) would be the highest in China, followed by Indonesia and India. In total, over 17.96 million lives could be saved by tax increases. Conclusion: Excise tax increases have a significant effect on the reduction of smoking prevalence and the number of averted smoking-attributable deaths. Middle- and upper-middle income countries would be most affected by high-taxation policies.

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