2017年-世界发展银行全球_Are_Tobacco_Taxes_Really_Regressive____Evidence_from_Chile_27页_1mb

Summary: Are Tobacco Taxes Really Regressive? Evidence from Chile

Core Content

This paper investigates whether tobacco taxes in Chile are regressive by analyzing the distributional effects of the tax on household incomes. It uses a social welfare framework to estimate the impact of tobacco tax increases on income, considering three key factors: (1) increased tobacco expenditures, (2) reduced medical expenses due to lower tobacco consumption, and (3) increased working years due to reduced mortality from tobacco-related diseases.

The paper challenges the conventional belief that tobacco taxes are regressive, as they disproportionately affect low-income families in terms of budget share. However, it argues that the long-term benefits from reduced health risks and medical costs may outweigh the short-term burden of higher tobacco prices, leading to a positive overall income effect for the population.

Main Points

• Tobacco Taxes and Regressivity:

  • Tobacco taxes are typically considered regressive because low-income households spend a larger share of their income on tobacco.
  • However, the paper suggests that the negative effects of tobacco consumption, such as higher medical expenses, reduced life expectancy, and disability, may lead to greater long-term benefits for these groups.

• Tobacco Consumption Trends:

  • Global tobacco consumption has been declining over the last 15 years.
  • Chile has implemented various anti-tobacco policies, including taxation, smoke-free laws, and health warnings, but still has high tobacco consumption rates compared to other countries.

• Health Impacts of Tobacco Use:

  • Tobacco use is associated with a wide range of health issues, including cancer, respiratory diseases, cardiovascular diseases, and adverse reproductive effects.
  • Secondhand smoke exposure also causes significant health risks, especially for children.
  • WHO estimates that secondhand smoke is responsible for over 600,000 premature deaths globally.

• Tobacco Taxation and Revenue:

  • Tobacco taxation is considered one of the most effective tools to reduce consumption and generate government revenue.
  • Chile has implemented both ad valorem and specific excise taxes, aligning with WHO best practices to make all cigarette brands equally costly.

• Price Elasticity of Tobacco Consumption:

  • The price elasticity of demand for tobacco varies across income groups and age cohorts.
  • Lower-income groups tend to have more elastic demand than higher-income groups.
  • Younger individuals are more responsive to price increases, which makes taxation an effective deterrent for them.

• Model and Methodology:

  • The paper uses a partial equilibrium model to simulate the effects of tobacco taxes on household income.
  • Three scenarios of price elasticity are considered to evaluate the distributional impact of the tax across different income deciles.
  • The model includes the following components:
    • Increase in tobacco expenditures due to price hikes.
    • Reduction in medical expenses due to lower tobacco use.
    • Increase in working years due to reduced mortality.

• Key Findings:

  • Although tobacco taxes generate negative income effects in the short term, they may result in positive net income effects when considering long-term health benefits.
  • The reduction in medical expenses is identified as the main driver of the net income gain.
  • The overall monetary effect of the tax policy becomes positive when incorporating health and productivity benefits.

Key Information

• Tobacco Taxes in Chile:

  • In 2010, the ad valorem tax was raised to 62.3% and the fixed tax to US$0.16 per 20-cigarette pack.
  • In 2014, the ad valorem tax was reduced to 30%, but the fixed tax was significantly increased to Ch$681 (US$1.28) per 20-cigarette pack.

• Elasticity Assumptions:

  • Lower-bound elasticity: -0.21 (based on Debrott Sánchez, 2006).
  • Medium-bound elasticity: -0.38 (based on Verguet et al., 2015).
  • Upper-bound elasticity: -0.75 (reflecting long-term effects, especially on younger populations).

• Income Impact Calculation:

  • The income effect is calculated as the sum of changes in tobacco expenditures, medical expenses, and working years.
  • The formula used is:
    $$
    \text{Income effect} = \Delta \text{Tobacco Expenditure} + \Delta \text{Medical Expenses} + \Delta \text{Working Years}
    $$

• Conclusion:

  • The distributional effects of tobacco taxes are closely tied to the long-term price elasticity of tobacco consumption.
  • The paper recommends coordinating taxation and behavioral change policies across income groups to maximize the positive impact of tobacco taxes on overall welfare and public health.

Policy Implications

• Tobacco taxes should be evaluated not only for their immediate fiscal impact but also for their long-term health and economic benefits.
• The reduction in medical costs and increase in working years can significantly offset the initial regressive burden of the tax.
• Policies should be tailored to account for differences in price elasticity across income groups to ensure effectiveness and equity in public health interventions.