BackgroundTobacco prevalence in Colombia is small compared with other Latin America despite the nation’s tobacco taxes being among the lowest in the region. However, tobacco taxes have increased several times during the last decade, and large increases in 2010 and 2016 impacted consumer prices.ObjectiveThis paper aims to estimate the price smoking participation elasticity (PPE) in Colombia, with specific reference to regional increases in consumer prices after 2010 tax policy changes.MethodsThe PPE is computed using logistic regression based on individual-level data from the National Psychoactive Substances Consumption Survey for 2008 and 2013. Our specific focus is state-level variation in Colombian cigarette prices between 2008 and 2013 induced by the tax hike in 2010.ResultsThe estimated PPE in Colombia is around −0.66 (p value=0.046). We find almost no differences across socioeconomic level, but price sensitivity was greater for women than men, and for relatively older individuals (ages 51–64).ConclusionsPPE for Colombia is above estimates for comparable middle-income countries such as Mexico. As a result, current estimates for health gains of tax policies are likely to be underestimated. Moreover, in contrast with the literature, we find that the PPE for the youth (≤25 years) is lower than older age groups, and there is no evidence of a prominent socio-economic status (SES) gradient.

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Transparency initiatives are well-known tools introduced to foster trust and empower citizens. To explain why some governments introduce them but others do not, in a theoretical model we interpret these initiatives as a signal that complements the information already provided by visible government performance. To analyze how citizens react to these initiatives, we conducted a randomized survey experiment in the City of Buenos Aires, Argentina, where the incumbent mayor made a set of post-electoral promises. Our results show that post-electoral promises matter in shaping citizens perceptions about the trustworthiness of the government. We find strong heterogeneity among three groups of citizens. A group unfamiliar with the policy was impervious to treatment: they seem to react to deeds, not words, and have low trust on average. The treatment effects are entirely through those vaguely familiar with the promises, closing the average gap in trust with those familiar with the promises. More generally, our study suggests that transparency initiatives may be an effective signal in a setting with some initial trust. Still their informational value may be more limited than visible public performance.