Tobacco Price Elasticity and Tax Progressivity in Moldova

Tobacco Price Elasticity and Tax Progressivity in Moldova

Tobacco-use–related diseases are the main cause of mortality in Moldova, where tobacco consumption is widely spread, especially among men. In addition to health concerns, tobacco consumption has economic consequences, as households spend substantia...

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Bibliographic Details
Main Authors: Fuchs, Alan, Meneses, Francisco
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2018
Subjects:
TOBACCO
TAXATION
TOBACCO TAX
SIN TAX
PRICE ELASTICITY
REGRESSIVE TAX
INCOME DISTRIBUTION
MORTALITY
HEALTH IMPACT
Online Access:http://documents.worldbank.org/curated/en/139091517503854559/Tobacco-price-elasticity-and-tax-progressivity-in-Moldova
http://hdl.handle.net/10986/29315
id okr-10986-29315
recordtype oai_dc
spelling okr-10986-293152021-06-08T14:42:48Z Tobacco Price Elasticity and Tax Progressivity in Moldova Fuchs, Alan Meneses, Francisco TOBACCO TAXATION TOBACCO TAX SIN TAX PRICE ELASTICITY REGRESSIVE TAX INCOME DISTRIBUTION MORTALITY HEALTH IMPACT Tobacco-use–related diseases are the main cause of mortality in Moldova, where tobacco consumption is widely spread, especially among men. In addition to health concerns, tobacco consumption has economic consequences, as households spend substantial resources on tobacco and related out-of-pocket medical costs. Tobacco tax increases are one of the most effective measures to reduce tobacco consumption, but are usually believed to be regressive, taxing the poor proportionally more than the rich. This paper estimates the tobacco price elasticity of demand for Moldova by income decile and undertakes an extended cost-benefit analysis to estimate the distributional effect of a rise in tobacco taxes on income distribution. The paper's main findings are that a tobacco price increase would generate a rise in expenditure deriving from direct tobacco price increases, but would reduce the costs of out-of-pocket medical expenses. Based on these two factors, the net effect of a tobacco tax increase would be progressive in the analyzed cases, ultimately benefitting the incomes of the lower-income groups in the population. 2018-02-05T20:32:58Z 2018-02-05T20:32:58Z 2018-02 Working Paper http://documents.worldbank.org/curated/en/139091517503854559/Tobacco-price-elasticity-and-tax-progressivity-in-Moldova http://hdl.handle.net/10986/29315 English Policy Research Working Paper;No. 8327 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia Moldova
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic TOBACCO
TAXATION
TOBACCO TAX
SIN TAX
PRICE ELASTICITY
REGRESSIVE TAX
INCOME DISTRIBUTION
MORTALITY
HEALTH IMPACT
spellingShingle TOBACCO
TAXATION
TOBACCO TAX
SIN TAX
PRICE ELASTICITY
REGRESSIVE TAX
INCOME DISTRIBUTION
MORTALITY
HEALTH IMPACT
Fuchs, Alan
Meneses, Francisco
Tobacco Price Elasticity and Tax Progressivity in Moldova
geographic_facet Europe and Central Asia
Moldova
relation Policy Research Working Paper;No. 8327
description Tobacco-use–related diseases are the main cause of mortality in Moldova, where tobacco consumption is widely spread, especially among men. In addition to health concerns, tobacco consumption has economic consequences, as households spend substantial resources on tobacco and related out-of-pocket medical costs. Tobacco tax increases are one of the most effective measures to reduce tobacco consumption, but are usually believed to be regressive, taxing the poor proportionally more than the rich. This paper estimates the tobacco price elasticity of demand for Moldova by income decile and undertakes an extended cost-benefit analysis to estimate the distributional effect of a rise in tobacco taxes on income distribution. The paper's main findings are that a tobacco price increase would generate a rise in expenditure deriving from direct tobacco price increases, but would reduce the costs of out-of-pocket medical expenses. Based on these two factors, the net effect of a tobacco tax increase would be progressive in the analyzed cases, ultimately benefitting the incomes of the lower-income groups in the population.
format Working Paper
author Fuchs, Alan
Meneses, Francisco
author_facet Fuchs, Alan
Meneses, Francisco
author_sort Fuchs, Alan
title Tobacco Price Elasticity and Tax Progressivity in Moldova
title_short Tobacco Price Elasticity and Tax Progressivity in Moldova
title_full Tobacco Price Elasticity and Tax Progressivity in Moldova
title_fullStr Tobacco Price Elasticity and Tax Progressivity in Moldova
title_full_unstemmed Tobacco Price Elasticity and Tax Progressivity in Moldova
title_sort tobacco price elasticity and tax progressivity in moldova
publisher World Bank, Washington, DC
publishDate 2018
url http://documents.worldbank.org/curated/en/139091517503854559/Tobacco-price-elasticity-and-tax-progressivity-in-Moldova
http://hdl.handle.net/10986/29315
_version_ 1764469034974183424

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