Tobacco Price Elasticity and Tax Progressivity in Moldova

Fuchs, Alan ; Meneses, Francisco

World Bank, Washington, DC

关键词: TOBACCO;    TAXATION;    TOBACCO TAX;    SIN TAX;    PRICE ELASTICITY;   

DOI  :  10.1596/1813-9450-8327
RP-ID  :  WPS8327

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Tobacco-use–related diseases are themain cause of mortality in Moldova, where tobaccoconsumption is widely spread, especially among men. Inaddition to health concerns, tobacco consumption haseconomic consequences, as households spend substantialresources on tobacco and related out-of-pocket medicalcosts. Tobacco tax increases are one of the most effectivemeasures to reduce tobacco consumption, but are usuallybelieved to be regressive, taxing the poor proportionallymore than the rich. This paper estimates the tobacco priceelasticity of demand for Moldova by income decile andundertakes an extended cost-benefit analysis to estimate thedistributional effect of a rise in tobacco taxes on incomedistribution. The paper's main findings are that atobacco price increase would generate a rise in expenditurederiving from direct tobacco price increases, but wouldreduce the costs of out-of-pocket medical expenses. Based onthese two factors, the net effect of a tobacco tax increasewould be progressive in the analyzed cases, ultimatelybenefitting the incomes of the lower-income groups in the population.