Publication: Impact of Cigarette Price Increase on Health and Financing Outcomes in Vietnam
Loading...
Date
2019-06-14
ISSN
Published
2019-06-14
Author(s)
Editor(s)
Abstract
This paper is part of additional efforts supported by the World Bank Global Tobacco Control Program to inform the Government of Vietnam on options for tobacco taxation by providing estimates of the impact of cigarette price increase across five income groups for the period 2020-2022 under two scenarios. Vietnam is an important country for global tobacco control, and currently has about 15 million males who smoke. To support government efforts to strengthen tobacco controlpolicies, most notably through a substantial increase in the excise tax of tobacco, weconducted an extended cost-effectiveness analysis to examine the distributional impactof a 32 percent and a 62 percent increase in cigarette prices under Scenario A and Scenario B,respectively. In conclusion, we found that higher cigarette prices would particularly benefit the poorest income quintile of the population, in terms of deaths averted, life-years saved, out of pocket expenditures for treating tobacco-attributable diseases, catastrophic health expenditures, and extreme poverty averted. The additional tax burden is, however, borne mostly by the top income group in the 62 percent price increase scenario. Thus, tobacco taxes are an effective way to improve health and reduce poverty in Vietnam.
Link to Data Set
Citation
“World Bank Group. 2019. Impact of Cigarette Price Increase on Health and Financing Outcomes in Vietnam. WBG Global Tobacco Control Program;. © World Bank. http://hdl.handle.net/10986/31948 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Aggregate Analysis of the Impact of Cigarette Tax Rate Increases on Tobacco Consumption and Government Revenue : The Case of Indonesia(World Bank, Washington, DC, 2005-01)This study uses aggregate times series data (annual data from 1970-2001) and monthly data from January 1996 to June 2001 to estimate the price and income elasticity of demand for tobacco products in Indonesia. Using various model specifications used in the cigarette demand literature, and then selecting the best model, it estimates the real price elasticity of cigarette demand as -0.345 and income elasticity of demand as 0.473. This inplies that a 10 percent real price increase would reduce consumption by 3.4 percent, and a 10 percent real income increase would raise consumption by 4.7 percent. The economic crisis after 1997 was found to increase consumption, over and above the effects of price and income, and the warning label on cigarette packs required after 1991 appears to have no significant impact on demand. Estimates based on the shorter period of monthly data showed less responsiveness to price and incomes, as would be expected. The study simulates the effects of a tax increase on total tobacco excise revenues and predicts that an increase in the tax level of 10, 50, or 100 percent would increase total tax revenue by 9 percent, 43 percent, and 82 percent respectively. The study comments on the effect of possible switching to cheaper products or illegal purchases.Publication An Extended Cost-Effectiveness Analysis of Tobacco Price Increases in the Kyrgyz Republic(World Bank, Washington, DC, 2018-04)Globally more than 7 million deaths a year are attributed to tobacco use, approximately 10 percent of which are among nonsmokers exposed to secondhand smoke. Most of these deaths occur in low- and middle-income countries (LMICs), and among a relatively young population. If current smoking patterns continue, tobacco will kill about one billion people this century. Tobacco taxes are among the most cost-effective tobacco control measures in the world. Yet often countries are reluctant to raise tobacco taxes due to their perceived regressivity. This study simulates the impact of higher tobacco prices resulting from increases in tobacco excise tax in the Kyrgyz Republic. The study uses extended cost-effectiveness analysis to measure the distributional consequences of proposed excise tax increases on: (a) averted premature tobacco-related deaths; (b) averted out-of-pocket (OOP) expenditures on treating tobacco-related disease; (c) government savings resulting from averted treatment costs for those covered under the State Guaranteed Benefit Package; and (d) averted poverty cases as a result of OOP spending. The Kyrgyz Republic has already introduced gradual tobacco tax increases that will take place up to 2022, but steps should be taken to ensure that these increases result in real price increases and to strengthen other tobacco control measures such as ensuring access to cessation services.Publication Economics of Tobacco Toolkit, Tool 3 : Economic Analysis of Tobacco Demand(World Bank, Washington, DC, 2013)The tobacco epidemic is a worldwide phenomenon with significantly destructive effects on developing, transitional, and industrialized nations. The first scientific evidence on the health consequences of tobacco consumption-specifically, smoking-was discovered in industrialized nations. As a result, the economic analysis of tobacco control issues began and was developed in these countries. This tool attempts to explain the process of analysis of demand for tobacco products as simply as possible. It includes discussions of basic economic and analysis principles (written for non-specialists such as policy makers and analysts) and more advanced technical points (intended for use by the economists and econometricians who will undertake the actual demand analysis). Consumption of tobacco products includes both smoked categories (e.g., cigarettes, hand-rolled tobacco, pipe tobacco, cigars, bidis, kreteks, etc.) and smokeless types (such as snuff and chewing tobacco). In industrialized countries, cigarettes disproportionately influence tobacco epidemics. This tool discusses and presents, in technical detail, each of the steps necessary to conduct an economic demand analysis on tobacco products. In addition, the reader is presented the fundamentals of demand analysis, including its purpose, assumptions, and requirements. In turn, the reasons to intervene in the market for tobacco products stem from the destructive nature of tobacco consumption. Smoking is the single largest preventable cause of premature death in industrialized countries. In economic terms, the principle of consumer sovereignty holds that individuals know what products are in their best interests to consume. Provided consumers know the risks concerned and internalize all the costs and benefits involved, private consumption decisions result in the most efficient allocation of society's scarce resources. Tobacco products are available to consumers for a price, and an issue of great interest to tobacco control advocates (and the tobacco industry) is to what extent are consumers willing to buy those tobacco products. For instance, the willingness to buy is strongly influenced by such characteristics as the consumer's sense of value, income level, and taste.Publication Economics of Tobacco Toolkit, Tool 2. Data for Economic Analysis(World Bank, Washington, DC, 2013)This tool provides a general introduction to 'the art' of building databases. It addresses a number of issues pertaining to the search, identification and preparation of data for meaningful economic analysis. It can best be thought of as a reference mechanism that provides support for the occasionally frustrated but endlessly hungry researcher working through the adventures of tobacco control analysis. Anyone can reference this tool. This tool addresses a variety of data issues as they pertain to the economic analyses presented in the remaining tools of this toolkit. Most countries in the world today report at least a basic set of national economic and social information. In addition, aggregate or 'macro' level data is also largely available at sub-national levels of these societies and captures information that's reflective of regional, state, provincial, county or other jurisdictional divisions of the country. Consumption represents product use. Therefore, data on tobacco consumption reflects the amount of tobacco products used by a consumer. Data on tobacco product consumption is required for any economic analysis related to the demand for tobacco. Tobacco consumption information can be obtained through surveys of households and/or individual consumers. National population surveys and censuses interview random samples of individuals and/or households in an effort to obtain behavioral and socioeconomic information that will best describe the characteristics of the nation's current population.Publication Economics of Tobacco Toolkit, Tool 6 : Equity Issues, Tobacco, and the Poor(World Bank, Washington, DC, 2013)Currently there are approximately 4 million tobacco related deaths annually. If present trends continue, by the year 2030 the number of deaths will soar to about 10 million annual deaths, with 7 million in low-income countries. However, government action to establish various tobacco control initiatives can prevent this from happening and save a significant number of lives. Tobacco control measures include: i) raising tobacco prices by imposing higher excise taxes; ii) advertising and marketing bans and restrictions; and iii) clean indoor air provisions. A popular and valid concern holds that raising tobacco excise taxes for the purposes of tobacco control imposes an untenable and unfair burden on the poor. In short, it is argued that higher tobacco excise taxes increase inequality in the post-tax distribution of income and reduces the real incomes of a particularly vulnerable group, the poor. This tool discusses a number of approaches in which to examine the validity of this argument. Techniques to analyze the impact of tobacco consumption and tobacco taxes on the poor are explained. And analytical methods using country-specific data are examined so that policy analysts can effectively address concerns about the poor, tobacco consumption, and tobacco control policies.
Users also downloaded
Showing related downloaded files
Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Global Economic Prospects, June 2024(Washington, DC: World Bank, 2024-06-11)After several years of negative shocks, global growth is expected to hold steady in 2024 and then edge up in the next couple of years, in part aided by cautious monetary policy easing as inflation gradually declines. However, economic prospects are envisaged to remain tepid, especially in the most vulnerable countries. Risks to the outlook, while more balanced, are still tilted to the downside, including the possibility of escalating geopolitical tensions, further trade fragmentation, and higher-for-longer interest rates. Natural disasters related to climate change could also hinder activity. Subdued growth prospects across many emerging market and developing economies and continued risks underscore the need for decisive policy action at the global and national levels. Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). Each edition includes analytical pieces on topical policy challenges faced by these economies.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.