Estimating the Distributional Impact of Increasing Taxes on Tobacco Products in Armenia

Postolovska, Iryna; Lavado, Rouselle F.; Tarr, Gillian A.M.; Verguet, Stéphane

doi:10.1596/26386

Cited by 4 publications

(10 citation statements)

References 19 publications

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“…However, some similar exercises have been performed for other countries of the region. The study by Postolovska et al (2017) in Armenia finds an elasticity of demand for tobacco of -0.54. Estimated at the decile-level, all results continue to be inelastic, and they decrease with income level (in absolute value).…”

Section: Price Elasticities Of Demand For Tobacco Productsmentioning

confidence: 99%

“…Taxes encourage current smokers to quit and discourage potential consumers to initiate, by increasing prices and reducing the affordability of tobacco products. Figure 1 was adapted from the work by Postolovska, Lavado, Tarr and Verguet (2017), to summarize the different channels through which increasing tobacco taxes can affect household incomes. After a tax increase, smokers who continue to purchase the same amount of tobacco will face a negative budget shock, as the tax-induced higher price of tobacco translates to higher shares of tobacco in household budgets and a loss in disposable income to consume other goods and services.…”

Section: The Mechanisms Of Taxing Tobacco On Household Welfarementioning

confidence: 99%

“…Similar studies have been conducted in the Europe and Central Asia (ECA) region, in countries that may be considered Georgia's peers. Using the ECBA on Armenia, Postolovska et al (2017) find that increasing the cigarette excise tax rate to 75 percent of the retail price would bring large health and financial benefits to Armenian households, with pro-poor impacts. They estimate that 88 thousand premature deaths, US$63 million in out-of-pocket medical expenses, 22 thousand poverty cases, and 32 thousand cases of catastrophic health expenditures could be averted with the price increase.…”

Section: The Mechanisms Of Taxing Tobacco On Household Welfarementioning

confidence: 99%

“…Mechanisms from tobacco taxes to costs and benefits on household welfare Source: Adapted fromPostolovska, Lavado, Tarr and Verguet (2017).…”

mentioning

confidence: 99%

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Taxing Tobacco in Georgia: Welfare and Distributional Gains of Smoking Cessation

Tarlovsky¹,

Icaza²

2020

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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Section: Price Elasticities Of Demand For Tobacco Productsmentioning

confidence: 99%

Section: The Mechanisms Of Taxing Tobacco On Household Welfarementioning

confidence: 99%

Section: The Mechanisms Of Taxing Tobacco On Household Welfarementioning

confidence: 99%

“…Mechanisms from tobacco taxes to costs and benefits on household welfare Source: Adapted fromPostolovska, Lavado, Tarr and Verguet (2017).…”

mentioning

confidence: 99%

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Taxing Tobacco in Georgia: Welfare and Distributional Gains of Smoking Cessation

Tarlovsky¹,

Icaza²

2020

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“…Specifically, increasing the excise tax rate from the existing 63 percent to the WHOrecommended level of 75 percent could further reduce the prevalence of smoking and deter the young population from initiating smoking. While countries often fail to raise tobacco taxes due to their perceived regressivity, a number of recent studies have found that tobacco taxes can indeed be pro-poor policies (Verguet et al, 2015, Postolovska et al, 2017, World Bank, 2017. Not only do they avert premature mortality, but they also improve financial risk protection by reducing the burden of tobacco-related diseases and associated out-of-pocket expenditures.…”

Section: Regulation On Front Of Pack Labelingmentioning

confidence: 99%

Non-Communicable Disease Burden in the Western Province, Sri Lanka

2017

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This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. .

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Equity impacts of price policies to promote healthy behaviours

et al. 2018

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Governments can use fiscal policies to regulate the prices and consumption of potentially unhealthy products. However, policies aimed at reducing consumption by increasing prices, for example by taxation, might impose an unfair financial burden on low-income households. We used data from household expenditure surveys to estimate patterns of expenditure on potentially unhealthy products by socioeconomic status, with a primary focus on low-income and middle-income countries. Price policies affect the consumption and expenditure of a larger number of high-income households than low-income households, and any resulting price increases tend to be financed disproportionately by high-income households. As a share of all household consumption, however, price increases are often a larger financial burden for low-income households than for high-income households, most consistently in the case of tobacco, depending on how much consumption decreases in response to increased prices. Large health benefits often accrue to individual low-income consumers because of their strong response to price changes. The potentially larger financial burden on low-income households created by taxation could be mitigated by a pro-poor use of the generated tax revenues.

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Estimating the Distributional Impact of Increasing Taxes on Tobacco Products in Armenia

Cited by 4 publications

References 19 publications

Taxing Tobacco in Georgia: Welfare and Distributional Gains of Smoking Cessation

Taxing Tobacco in Georgia: Welfare and Distributional Gains of Smoking Cessation

Non-Communicable Disease Burden in the Western Province, Sri Lanka

Equity impacts of price policies to promote healthy behaviours

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