Working Paper

Are Tobacco Taxes Really Regressive? : Evidence from Chile

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collection.link.213
https://openknowledge.worldbank.org/handle/10986/11866
collection.name.213
Other papers
dc.contributor.author
Fuchs, Alan
dc.contributor.author
Meneses, Francisco
dc.date.accessioned
2017-01-31T17:39:49Z
dc.date.available
2017-01-31T17:39:49Z
dc.date.issued
2017-01-04
dc.date.lastModified
2021-06-14T10:14:49Z
dc.description.abstract
Tobacco taxes are deemed regressive as poorest families tend to allocate larger shares of their budget to purchase tobacco. However, as taxes also discourage tobacco use, some of the most adverse effects, including higher medical expenses, lower life expectancy at birth, added years of disability among smokers, and reductions in the quality of life, among other, will be reduced. This paper describes and simulates the effects of the tobacco tax on incomes in Chile assuming three different price-elasticity scenarios for different income deciles of the population. Results show that although price increase for tobacco through higher taxes generates negative income variations across all groups in a population, under a more comprehensive scenario that includes benefits through lower medical expenses and an increase in working years, the results invert, and the overall monetary effect of the taxation policy becomes positive. Moreover, the reduction in medical expenses seems to be the main driver of the increase in net incomes because of the reduction in tobacco-related problems that require expensive treatments. Lastly, as the distributional effects of tobacco taxes are directly related to the long-term price elasticities of tobacco consumption, it will be advisable a coordination between taxation and behavioral change policies across income groups.
en
dc.identifier
http://documents.worldbank.org/curated/en/389891484567069411/Are-tobacco-taxes-really-regressive-evidence-from-Chile
dc.identifier.uri
http://hdl.handle.net/10986/25969
dc.language
English
dc.language.iso
en_US
dc.publisher
World Bank, Washington, DC
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo
dc.subject
taxes
dc.subject
tobacco
dc.subject
poverty
dc.subject
regressive tax
dc.subject
distributional impact
dc.title
Are Tobacco Taxes Really Regressive?
en
dc.title.subtitle
Evidence from Chile
en
dc.type
Working Paper
en
okr.crossref.title
Are Tobacco Taxes Really Regressive?
okr.date.disclosure
2017-01-16
okr.doctype
Publications & Research
okr.doctype
Publications & Research :: Working Paper
okr.docurl
http://documents.worldbank.org/curated/en/389891484567069411/Are-tobacco-taxes-really-regressive-evidence-from-Chile
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/25969
okr.identifier.externaldocumentum
090224b08494b9c7_2_0
okr.identifier.internaldocumentum
27099864
okr.identifier.report
112072
okr.identifier.report
112786
okr.imported
true
okr.language.supported
en
okr.pdfurl
http://documents.worldbank.org/curated/en/389891484567069411/pdf/112072-WP-AreTobaccoTaxesReallyRegressive-Jan12-2017-PUBLIC.pdf
en
okr.region.administrative
Latin America & Caribbean
okr.region.country
Chile
okr.topic
Health, Nutrition and Population :: Tobacco Use and Control
okr.topic
Macroeconomics and Economic Growth :: Economic Theory & Research
okr.topic
Macroeconomics and Economic Growth :: Taxation & Subsidies
okr.topic
Poverty Reduction :: Equity and Development
okr.topic
Poverty Reduction :: Poverty and Health
okr.unit
Poverty GP LCR (GPV04)

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