2003年-世界发展银行全球_The_Economics_of_Tobacco_in_Sri_Lanka_54页_769kb

The Economics of Tobacco in Sri Lanka

Core Content

This document provides an in-depth economic analysis of the tobacco industry in Sri Lanka, focusing on its contribution to the economy, the impact of tobacco use on different socio-economic groups, and the potential benefits of tobacco control measures such as tax increases and advertising bans.

Main Points

1. Tobacco Use Trends in Sri Lanka

• Prevalence: In 1991, 38% to 51% of men (lowest in Colombo, higher in farming areas) and 1% of women used tobacco. By 2000, this had declined to 24% for men and 6% for women nationally.
• Smoking Patterns: Smoking prevalence was highest among individuals aged 30–60, those with low education, and those in the second and third lowest expenditure quintiles.
• Types of Tobacco Use: Tobacco is used in two forms: smoking (cigarettes, bidi, cigars, pipes) and chewing. Smoking is more prevalent among men, while chewing is also common, especially in rural areas.
• District Variations:
  • In 1991, Colombo had the lowest smoking prevalence among men (38% current smokers), while Hambantota and Polonnaruwa had higher rates (44–51%).
  • In 2000, the prevalence of current tobacco users among men fell significantly in all districts, with Colombo at 17% and Hambantota at 22%.
  • Female smoking prevalence increased from 1% to 6% nationally between 1991 and 2000, with variations across districts.

2. Economic Contribution of the Tobacco Industry

• Employment:
  • Tobacco farming provides 5,355 to 16,580 full-time equivalent jobs, representing 0.08–0.25% of the total labor force.
  • Manufacturing employment decreased from 6–7% of all manufacturing jobs in 1990 to 4–5% in recent years.
  • The industry also generates indirect employment (e.g., fertilizer and pesticide suppliers), estimated at around 600 jobs.
• Wages and Salaries:
  • Average wages in the tobacco industry are about half of those in the broader manufacturing sector.
  • Real wages have slightly declined during the 1990s.
• Tax Revenues:
  • Excise taxes on tobacco products account for about 77% of the retail price.
  • In 1995, the excise rate increase almost doubled the total tax revenue.
  • Tobacco taxes contributed about 10% of total government revenues throughout the 1990s.
• Trade:
  • Sri Lanka has become a net importer of tobacco, with declining export values.
  • The trade balance is negatively affected due to the outflow of foreign exchange.

3. Economic Analysis of Tobacco Demand

• Demand Model: A two-part model was used to estimate the decision to smoke and the quantity of tobacco consumed, considering price, income, gender, occupation, education, age, and geographic location.
• Income and Price Elasticity:
  • Lower-income groups are more responsive to price changes. A 10% real price increase would reduce tobacco consumption by 6% for lower-income individuals and 3% for higher-income groups.
  • Higher income and education are associated with lower tobacco consumption.
• Policy Simulations:
  • A 50% real price increase is needed to observe a significant change in tobacco use prevalence.
  • Tax increases do not reduce total government revenues, as the decline in consumption is proportionally smaller than the tax increase.
  • High-income groups spend only 0.6% of total expenditures on tobacco, and even a 100% price increase has negligible impact on their spending.

4. Tobacco Control and Public Health

• Effectiveness of Measures: Tax increases are the most effective and cost-efficient tool for reducing tobacco use, especially among young people and low-income individuals.
• Corruption and Smuggling: Smuggling is more attributable to general corruption than to high taxes or price differentials.
• Recommendations:
  • Governments should increase tobacco taxes without fearing economic loss.
  • More public education on the health risks of tobacco and the benefits of quitting is needed.
  • Advertising and promotion should be banned, particularly targeting youth.
  • Policies should be designed to protect low-income and less-educated populations, who are most affected by tobacco use.

Key Information

• The study is based on data from two major surveys: TAD 1992 (1991 data) and SLIS 2000 (2000 data).
• The findings suggest that tobacco control measures can be implemented without significant economic repercussions.
• The economic contribution of the tobacco industry is relatively small compared to the public health costs associated with tobacco use.
• The report was prepared for the World Bank in 2001 and published as an HNP Discussion Paper in 2003.
• It was produced in collaboration with the World Health Organization's Tobacco Free Initiative.

Conclusion

The document concludes that increasing tobacco taxes is a viable and beneficial strategy for reducing tobacco use, especially among low-income and less-educated populations. It also emphasizes the need for comprehensive public health campaigns and strict advertising bans to curb tobacco consumption and its associated health and economic burdens.