The Distributional Effects of Tobacco Taxation : The Evidence of White and Clove Cigarettes in Indonesia
Despite the well-known positive impact of tobacco taxes on health outcomes, policy makers hesitate to use them because of their possible regressive effect, that is, poorer deciles are proportionally more negatively affected than richer ones. Using...
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/947511534513877197/The-distributional-effects-of-tobacco-taxation-the-evidence-of-white-and-clove-cigarettes-in-Indonesia http://hdl.handle.net/10986/30285 |
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okr-10986-302852021-06-08T14:42:47Z The Distributional Effects of Tobacco Taxation : The Evidence of White and Clove Cigarettes in Indonesia Fuchs, Alan Del Carmen, Giselle TOBACCO TAX DISTRIBUTIONAL IMPACT INEQUALITY REGRESSIVITY CIGARETTE SMOKING PRICE EFFECT PRICE ELASTICITY PVOERTY TAXATION EXCISE TAX SIN TAX CLOVE CIGARETTE Despite the well-known positive impact of tobacco taxes on health outcomes, policy makers hesitate to use them because of their possible regressive effect, that is, poorer deciles are proportionally more negatively affected than richer ones. Using an extended cost-benefit analysis to estimate the distributional effect of white and clove cigarettes in Indonesia, this study finds that the long-run impact may be progressive. The final aggregate effect incorporates the negative price effect, but also changes in medical expenditures and additional working years. The analysis includes estimates of the distributional impacts of price rises on cigarettes under various scenarios using 2015–16 Indonesia National Socioeconomic Surveys. One contribution is to quantify the impacts by allowing price elasticities to vary across consumption deciles. Overall, clove cigarette taxes exert an effect that depends on the assumptions of conditional price elasticity. If the population is more responsive to tobacco price changes, then people would experience even more gains from the health and work benefits. More research is needed to clarify the distributional effects of tobacco taxation in Indonesia. 2018-08-23T16:13:21Z 2018-08-23T16:13:21Z 2018-08 Working Paper http://documents.worldbank.org/curated/en/947511534513877197/The-distributional-effects-of-tobacco-taxation-the-evidence-of-white-and-clove-cigarettes-in-Indonesia http://hdl.handle.net/10986/30285 English Policy Research Working Paper;No. 8558 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 East Asia and Pacific Indonesia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
TOBACCO TAX DISTRIBUTIONAL IMPACT INEQUALITY REGRESSIVITY CIGARETTE SMOKING PRICE EFFECT PRICE ELASTICITY PVOERTY TAXATION EXCISE TAX SIN TAX CLOVE CIGARETTE |
| spellingShingle |
TOBACCO TAX DISTRIBUTIONAL IMPACT INEQUALITY REGRESSIVITY CIGARETTE SMOKING PRICE EFFECT PRICE ELASTICITY PVOERTY TAXATION EXCISE TAX SIN TAX CLOVE CIGARETTE Fuchs, Alan Del Carmen, Giselle The Distributional Effects of Tobacco Taxation : The Evidence of White and Clove Cigarettes in Indonesia |
| geographic_facet |
East Asia and Pacific Indonesia |
| relation |
Policy Research Working Paper;No. 8558 |
| description |
Despite the well-known positive impact
of tobacco taxes on health outcomes, policy makers hesitate
to use them because of their possible regressive effect,
that is, poorer deciles are proportionally more negatively
affected than richer ones. Using an extended cost-benefit
analysis to estimate the distributional effect of white and
clove cigarettes in Indonesia, this study finds that the
long-run impact may be progressive. The final aggregate
effect incorporates the negative price effect, but also
changes in medical expenditures and additional working
years. The analysis includes estimates of the distributional
impacts of price rises on cigarettes under various scenarios
using 2015–16 Indonesia National Socioeconomic Surveys. One
contribution is to quantify the impacts by allowing price
elasticities to vary across consumption deciles. Overall,
clove cigarette taxes exert an effect that depends on the
assumptions of conditional price elasticity. If the
population is more responsive to tobacco price changes, then
people would experience even more gains from the health and
work benefits. More research is needed to clarify the
distributional effects of tobacco taxation in Indonesia. |
| format |
Working Paper |
| author |
Fuchs, Alan Del Carmen, Giselle |
| author_facet |
Fuchs, Alan Del Carmen, Giselle |
| author_sort |
Fuchs, Alan |
| title |
The Distributional Effects of Tobacco Taxation : The Evidence of White and Clove Cigarettes in Indonesia |
| title_short |
The Distributional Effects of Tobacco Taxation : The Evidence of White and Clove Cigarettes in Indonesia |
| title_full |
The Distributional Effects of Tobacco Taxation : The Evidence of White and Clove Cigarettes in Indonesia |
| title_fullStr |
The Distributional Effects of Tobacco Taxation : The Evidence of White and Clove Cigarettes in Indonesia |
| title_full_unstemmed |
The Distributional Effects of Tobacco Taxation : The Evidence of White and Clove Cigarettes in Indonesia |
| title_sort |
distributional effects of tobacco taxation : the evidence of white and clove cigarettes in indonesia |
| publisher |
World Bank, Washington, DC |
| publishDate |
2018 |
| url |
http://documents.worldbank.org/curated/en/947511534513877197/The-distributional-effects-of-tobacco-taxation-the-evidence-of-white-and-clove-cigarettes-in-Indonesia http://hdl.handle.net/10986/30285 |
| _version_ |
1764471608362139648 |