Differential price responses for tobacco consumption: implications for tax incidence
- Autores
- Cruces, Guillermo Antonio; Falcone, Guillermo Enrique; Puig, Jorge
- Año de publicación
- 2022
- Idioma
- inglés
- Tipo de recurso
- artículo
- Estado
- versión publicada
- Descripción
- Increasing tobacco taxes is considered the most effective an cost-eï¬ €ective 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.
Fil: Cruces, Guillermo Antonio. Universidad Nacional de la Plata. Facultad de Cs.economicas. Instituto de Investigaciones Economicas.; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata; Argentina
Fil: Falcone, Guillermo Enrique. Universidad Nacional de la Plata. Facultad de Cs.economicas. Instituto de Investigaciones Economicas.; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata; Argentina
Fil: Puig, Jorge. Universidad Nacional de la Plata. Facultad de Cs.economicas. Instituto de Investigaciones Economicas.; Argentina - Materia
-
ECONOMICS
LOW/MIDDLE-INCOME COUNTRY
PUBLIC POLICY
TAXATION
TOBACCO INDUSTRY - Nivel de accesibilidad
- acceso abierto
- Condiciones de uso
- https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
- Repositorio
- Institución
- Consejo Nacional de Investigaciones Científicas y Técnicas
- OAI Identificador
- oai:ri.conicet.gov.ar:11336/212630
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Differential price responses for tobacco consumption: implications for tax incidenceCruces, Guillermo AntonioFalcone, Guillermo EnriquePuig, JorgeECONOMICSLOW/MIDDLE-INCOME COUNTRYPUBLIC POLICYTAXATIONTOBACCO INDUSTRYhttps://purl.org/becyt/ford/5.2https://purl.org/becyt/ford/5Increasing tobacco taxes is considered the most effective an cost-eï¬ €ective 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.Fil: Cruces, Guillermo Antonio. Universidad Nacional de la Plata. Facultad de Cs.economicas. Instituto de Investigaciones Economicas.; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata; ArgentinaFil: Falcone, Guillermo Enrique. Universidad Nacional de la Plata. Facultad de Cs.economicas. Instituto de Investigaciones Economicas.; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata; ArgentinaFil: Puig, Jorge. Universidad Nacional de la Plata. Facultad de Cs.economicas. Instituto de Investigaciones Economicas.; ArgentinaB M J Publishing Group2022-01info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://purl.org/coar/resource_type/c_6501info:ar-repo/semantics/articuloapplication/pdfapplication/pdfapplication/pdfhttp://hdl.handle.net/11336/212630Cruces, Guillermo Antonio; Falcone, Guillermo Enrique; Puig, Jorge; Differential price responses for tobacco consumption: implications for tax incidence; B M J Publishing Group; Tobacco Control; 1-2022; 1-60964-4563CONICET DigitalCONICETenginfo:eu-repo/semantics/altIdentifier/url/https://tobaccocontrol.bmj.com/lookup/doi/10.1136/tobaccocontrol-2021-056846info:eu-repo/semantics/altIdentifier/doi/10.1136/tobaccocontrol-2021-056846info:eu-repo/semantics/openAccesshttps://creativecommons.org/licenses/by-nc-sa/2.5/ar/reponame:CONICET Digital (CONICET)instname:Consejo Nacional de Investigaciones Científicas y Técnicas2025-09-29T10:22:50Zoai:ri.conicet.gov.ar:11336/212630instacron:CONICETInstitucionalhttp://ri.conicet.gov.ar/Organismo científico-tecnológicoNo correspondehttp://ri.conicet.gov.ar/oai/requestdasensio@conicet.gov.ar; lcarlino@conicet.gov.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:34982025-09-29 10:22:50.908CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicasfalse |
dc.title.none.fl_str_mv |
Differential price responses for tobacco consumption: implications for tax incidence |
title |
Differential price responses for tobacco consumption: implications for tax incidence |
spellingShingle |
Differential price responses for tobacco consumption: implications for tax incidence Cruces, Guillermo Antonio ECONOMICS LOW/MIDDLE-INCOME COUNTRY PUBLIC POLICY TAXATION TOBACCO INDUSTRY |
title_short |
Differential price responses for tobacco consumption: implications for tax incidence |
title_full |
Differential price responses for tobacco consumption: implications for tax incidence |
title_fullStr |
Differential price responses for tobacco consumption: implications for tax incidence |
title_full_unstemmed |
Differential price responses for tobacco consumption: implications for tax incidence |
title_sort |
Differential price responses for tobacco consumption: implications for tax incidence |
dc.creator.none.fl_str_mv |
Cruces, Guillermo Antonio Falcone, Guillermo Enrique Puig, Jorge |
author |
Cruces, Guillermo Antonio |
author_facet |
Cruces, Guillermo Antonio Falcone, Guillermo Enrique Puig, Jorge |
author_role |
author |
author2 |
Falcone, Guillermo Enrique Puig, Jorge |
author2_role |
author author |
dc.subject.none.fl_str_mv |
ECONOMICS LOW/MIDDLE-INCOME COUNTRY PUBLIC POLICY TAXATION TOBACCO INDUSTRY |
topic |
ECONOMICS LOW/MIDDLE-INCOME COUNTRY PUBLIC POLICY TAXATION TOBACCO INDUSTRY |
purl_subject.fl_str_mv |
https://purl.org/becyt/ford/5.2 https://purl.org/becyt/ford/5 |
dc.description.none.fl_txt_mv |
Increasing tobacco taxes is considered the most effective an cost-eï¬ €ective 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. Fil: Cruces, Guillermo Antonio. Universidad Nacional de la Plata. Facultad de Cs.economicas. Instituto de Investigaciones Economicas.; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata; Argentina Fil: Falcone, Guillermo Enrique. Universidad Nacional de la Plata. Facultad de Cs.economicas. Instituto de Investigaciones Economicas.; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata; Argentina Fil: Puig, Jorge. Universidad Nacional de la Plata. Facultad de Cs.economicas. Instituto de Investigaciones Economicas.; Argentina |
description |
Increasing tobacco taxes is considered the most effective an cost-eï¬ €ective 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. |
publishDate |
2022 |
dc.date.none.fl_str_mv |
2022-01 |
dc.type.none.fl_str_mv |
info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion http://purl.org/coar/resource_type/c_6501 info:ar-repo/semantics/articulo |
format |
article |
status_str |
publishedVersion |
dc.identifier.none.fl_str_mv |
http://hdl.handle.net/11336/212630 Cruces, Guillermo Antonio; Falcone, Guillermo Enrique; Puig, Jorge; Differential price responses for tobacco consumption: implications for tax incidence; B M J Publishing Group; Tobacco Control; 1-2022; 1-6 0964-4563 CONICET Digital CONICET |
url |
http://hdl.handle.net/11336/212630 |
identifier_str_mv |
Cruces, Guillermo Antonio; Falcone, Guillermo Enrique; Puig, Jorge; Differential price responses for tobacco consumption: implications for tax incidence; B M J Publishing Group; Tobacco Control; 1-2022; 1-6 0964-4563 CONICET Digital CONICET |
dc.language.none.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
info:eu-repo/semantics/altIdentifier/url/https://tobaccocontrol.bmj.com/lookup/doi/10.1136/tobaccocontrol-2021-056846 info:eu-repo/semantics/altIdentifier/doi/10.1136/tobaccocontrol-2021-056846 |
dc.rights.none.fl_str_mv |
info:eu-repo/semantics/openAccess https://creativecommons.org/licenses/by-nc-sa/2.5/ar/ |
eu_rights_str_mv |
openAccess |
rights_invalid_str_mv |
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/ |
dc.format.none.fl_str_mv |
application/pdf application/pdf application/pdf |
dc.publisher.none.fl_str_mv |
B M J Publishing Group |
publisher.none.fl_str_mv |
B M J Publishing Group |
dc.source.none.fl_str_mv |
reponame:CONICET Digital (CONICET) instname:Consejo Nacional de Investigaciones Científicas y Técnicas |
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CONICET Digital (CONICET) |
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Consejo Nacional de Investigaciones Científicas y Técnicas |
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CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicas |
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dasensio@conicet.gov.ar; lcarlino@conicet.gov.ar |
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