Publication:
Long-Run Impacts of Increasing Tobacco Taxes: Evidence from South Africa

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dc.contributor.authorFuchs, Alan
dc.contributor.authorDel Carmen, Giselle
dc.contributor.authorMukong, Alfred Kechia
dc.date.accessioned2018-03-20T16:18:56Z
dc.date.available2018-03-20T16:18:56Z
dc.date.issued2018-03
dc.description.abstractTobacco taxes are considered an effective policy tool to reduce tobacco consumption and produce long-run benefits that outweigh the costs associated with a price increase. Through this policy, some of the most adverse effects and economic costs of smoking can be reduced, including shorter life expectancy, higher medical expenses, added years of disability among smokers, and the effects of secondhand smoke. Nonetheless, tobacco taxes are often considered regressive because low-income households tend to allocate a larger share of their budgets to purchasing tobacco products. This paper uses an extended cost-benefit analysis to estimate the distributional effect of tobacco taxes on household welfare in South Africa. The analysis considers the effect on household income through an increase in tobacco prices, changes in medical expenses, and the prolongation of working years. The results indicate that a rise in tobacco prices initially generates negative income variations across all groups in the population. If benefits through lower medical expenses and an expansion in working years are considered, the negative effect is reduced, particularly in medium- and upper-bound elasticities. Consequently, the aggregate net effect is progressive and benefits the bottom deciles more than the richer ones. Overall, tobacco tax increases exert a small, but positive effect in the presence of low conditional tobacco price elasticity. If the population is more responsive to tobacco price changes (or participation elasticity estimates are included), then they would experience even more gains from the health and work benefits. More research is needed to clarify the distributional effects of tobacco taxation in South Africa.en
dc.identifierhttp://documents.worldbank.org/curated/en/122081521480061194/Long-run-impacts-of-increasing-tobacco-taxes-evidence-from-South-Africa
dc.identifier.doi10.1596/1813-9450-8369
dc.identifier.urihttps://hdl.handle.net/10986/29497
dc.languageEnglish
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesPolicy Research Working Paper;No. 8369
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectTOBACCO TAX
dc.subjectTOBACCO CONSUMPTION
dc.subjectTAXATION
dc.subjectEXCISE TAX
dc.subjectSIN TAX
dc.subjectTOBACCO CONTROL
dc.subjectHEALTH EFFECT
dc.subjectHOUSEHOLD BUDGET
dc.subjectGOVERNMENT REVENUE
dc.subjectHEALTH EXPENDITURE
dc.subjectTAX POLICY
dc.subjectCIGARETTE CONSUMPTION
dc.titleLong-Run Impacts of Increasing Tobacco Taxesen
dc.title.subtitleEvidence from South Africaen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleLong-Run Impacts of Increasing Tobacco Taxes: Evidence from South Africa
okr.date.disclosure2018-03-19
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/122081521480061194/Long-run-impacts-of-increasing-tobacco-taxes-evidence-from-South-Africa
okr.guid122081521480061194
okr.identifier.doi10.1596/1813-9450-8369
okr.identifier.externaldocumentum090224b0857d2743_3_0
okr.identifier.internaldocumentum29732031
okr.identifier.reportWPS8369
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/122081521480061194/pdf/WPS8367.pdfen
okr.region.administrativeAfrica
okr.region.countrySouth Africa
okr.statistics.combined2243
okr.statistics.dr122081521480061194
okr.statistics.drstats1434
okr.topicHealth, Nutrition and Population::Cancer
okr.topicHealth, Nutrition and Population::Disease Control & Prevention
okr.topicHealth, Nutrition and Population::Tobacco Use and Control
okr.topicMacroeconomics and Economic Growth::Taxation & Subsidies
okr.unitOff of Sr VP Dev Econ/Chief Econ (DECVP)
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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