2004年-世界发展银行全球_The_Economics_of_Tobacco_in_Estonia_58页_623kb

Summary of The Economics of Tobacco in Estonia

Core Content

This document presents an in-depth analysis of the economic impact of tobacco use in Estonia, focusing on both the private and public costs associated with smoking, as well as the effects of pricing and taxation policies on cigarette demand. The study, conducted in 1998 and published in 2004, provides a comprehensive overview of the burden of tobacco-related diseases and the financial consequences of smoking on individuals, families, and the government.

Main Viewpoints

• Tobacco Use Prevalence: Smoking was widespread in Estonia during the 1990s, with 52% of men and 23% of women in the working age group (16–65 years) being daily smokers in 1994. By 1998, this had decreased to 42% of men and 20% of women, representing a 10% and 15% reduction respectively.
• Economic Burden: The study estimates that the total cost of smoking to the Estonian government in 1998 exceeded the tobacco tax revenues by over EEK 200 million. This includes health care costs, lost productivity, sickness benefits, disability pensions, and survivors' pensions.
• Health Impact: Smoking-related diseases accounted for 19% of all deaths in Estonia in 1998, with significant impacts on public health and the economy.
• Price Elasticity: The price elasticity of cigarette demand in Estonia is estimated at -0.34, indicating that a 10% increase in real price leads to a 3.4% decrease in consumption. This suggests that price-based interventions, such as tax increases, can be effective in reducing smoking.
• Taxation Policy: The study highlights that increasing tobacco taxes can increase tax revenues from local consumption, even with some substitution to illegal purchases. However, the impact of tax changes is influenced by the behavior of foreign visitors, who often purchase cigarettes in Estonia due to lower prices.
• Policy Implications: The report concludes that stricter tobacco control measures, including higher taxation, can lead to improved public health, reduced premature deaths, and increased productivity, ultimately benefiting the economy.

Key Information

Part I – Tobacco Use and Associated Costs

Chapter 2: Smoking Habits and Prevalence

• Estonia's adult population (aged 18 and over) had a high smoking prevalence in the 1990s.
• In 1996, 73% of males and 31% of females had ever smoked.
• By 1998, the prevalence of daily smoking among men and women aged 16–64 was 42% and 20%, respectively.
• The total number of daily smokers in 1998 was 290,098, with 69% being male.
• Smoking rates among women were higher than among men in most age groups during the 1990s.

Chapter 3: Private Costs of Smoking

• Direct Costs:

  • Expenditure on Cigarettes: Smokers spent an average of 7% of their income on cigarettes.
  • Individual Medical Costs: Smokers incurred significant health care costs due to smoking-related illnesses.
  • Losses Due to Fires: Smoking-related fires contributed to additional costs.

• Indirect Costs:

  • Mortality: Smoking-related deaths led to a loss of household income.
  • Absence from Work: Smokers experienced reduced productivity due to illness and absence from work.
  • Lost Income: These indirect costs were substantial, with estimates of lost earnings due to premature mortality.

Chapter 4: Public Costs of Smoking

• Direct Public Costs:

  • Health Care Costs: The Sick Fund spent EEK 193 million on treating smoking-related diseases in 1998, accounting for 7% of the health care budget.
  • Sickness Benefits: EEK 118 million was spent on sickness benefits.
  • Disability Pensions: EEK 75 million was spent on disability pensions.
  • Health Promotion: Costs associated with public health campaigns were also considered.

• Indirect Public Costs:

  • Retirement Pensions: A reduction in retirement pension fund payments was estimated at EEK 213 million due to premature mortality.
  • Survivors' Pensions: EEK 21 million was spent on survivors' pensions for the families of deceased smokers.
  • Loss of Productivity: Smoking-related illness and disability caused a loss of productivity, estimated at EEK 404 million.
  • Tax Deficit: The government experienced a tax deficit of EEK 404 million due to smoking-related productivity loss.

Chapter 5: Costs of Smoking – Summary and Policy Implications

• The total cost of smoking in 1998 to the government was over EEK 200 million, in addition to a much larger societal cost due to lost productivity.
• The report emphasizes that tax increases, despite concerns about smuggling, can increase tax revenues and reduce smoking-related health costs.
• It recommends stronger tobacco control measures, including higher taxation, to improve public health and economic performance.

Part II – Pricing and Taxation Policy Issues

Chapter 6: Pricing and Taxation of Cigarettes

• Tobacco taxation is a key policy tool for reducing smoking and its associated health and economic costs.
• The report provides an overview of Estonia's tobacco taxation policies, including the impact of tax increases on consumption and revenue.

Chapter 7: Structure of the Estonian Cigarette Market

• Estonia has no domestic tobacco industry since 1996, when the last local factory closed.
• The country relies on imports, and the cigarette market is heavily influenced by foreign visitors.

Chapter 8: Demand Models for Cigarette Consumption

• A demand model was estimated using monthly and annual data from 1992 to 2000.
• The price elasticity of cigarette demand was found to be -0.34, showing that price increases lead to a proportional reduction in consumption.

Chapter 9: Predicting Tax Revenues as Tax Rates Change

• The study forecasts that a 0.5 EEK tax increase in 2001 would raise tax revenues by 26 million EEK, assuming constant foreign purchases.
• The impact of tax changes is also affected by the behavior of foreign visitors, who continue to buy cigarettes in Estonia despite higher prices.

Chapter 10: Summary

• The report concludes that tobacco control policies, especially higher taxation, are essential for reducing smoking and its associated costs.
• These policies can lead to healthier populations, reduced premature deaths, and increased productivity, which are beneficial for the economy.

Policy Recommendations

• Increase tobacco taxes to reduce consumption and generate more revenue.
• Implement comprehensive bans on smoking in public places and restrict tobacco advertising.
• Provide support for smoking cessation programs and public health education.
• Monitor and regulate the cigarette market to reduce smuggling and illegal sales.

Conclusion

• Smoking imposes a significant economic burden on Estonia, both on individuals and society.
• Effective tobacco control policies, including higher taxation, are crucial for improving public health and economic outcomes.
• The study serves as a methodological model for future research and policy development in tobacco control.