Distributional Effects of Tobacco Taxation

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dc.creatorFuchs, Alan
dc.creatorGonzález Icaza, Fernanda
dc.creatorPaz, Daniela
dc.date2019-04-11T20:31:53Z
dc.date2019-04-11T20:31:53Z
dc.date2019-04
dc.date.accessioned2026-07-01T00:42:15Z
dc.descriptionTobacco taxes have positive impacts on health outcomes. However, policy makers often hesitate to use them because of the perception that poorer households are affected disproportionally more than richer households. This study compares the simulated distributional effects of tobacco tax increases in eight low- and middle-income countries. It applies a standardized extended cost-benefit analysis methodology and relies on comparable data sources across countries. The net effect of raising taxes on cigarettes encompasses the direct negative price shock to household budgets and the long-term benefits of improved health outcomes. The distributional incidence is assessed by estimating decile-specific behavioral responses and relative income gains. The comparative results do not support the claim that tobacco taxes are necessarily regressive. Although welfare losses from the first-order price shock disproportionally affect the poor, these negative shocks are attenuated by greater price-responsiveness among lower-income groups and further offset by higher long-term relative gains through reduced medical expenditures and additional years of productive life as taxes dissuade smoking. In several countries, increasing the price of cigarettes is pro-poor and welfare improving for a large share of the population. Along with raising taxes, policy should aim at encouraging responsiveness to price changes and target tobacco-related medical expenses that disproportionally burden the poor.
dc.formatapplication/pdf
dc.identifierhttp://documents.worldbank.org/curated/en/899011554727317064/Distributional-Effects-of-Tobacco-Taxation-A-Comparative-Analysis
dc.identifierhttps://hdl.handle.net/10986/31534
dc.identifier10.1596/1813-9450-8805
dc.identifier.urihttp://hdl.handle.net/123456789/409510
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper;No. 8805
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo
dc.rightsWorld Bank
dc.subjectTOBACCO CONTROL
dc.subjectTAXATION
dc.subjectTOBACCO TAX
dc.subjectSIN TAX
dc.subjectINCOME DISTRIBUTION
dc.subjectDISTRIBUTIONAL IMPACT
dc.subjectPOVERTY
dc.subjectCIGARETTE TAX
dc.titleDistributional Effects of Tobacco Taxation
dc.titleA Comparative Analysis
dc.typeWorking Paper
dc.typeDocument de travail
dc.typeDocumento de trabajo

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