2018年-世界发展银行全球_Tobacco_Price_Elasticity_and_Tax_Progressivity_in_Moldova_25页_1022kb

Summary of "Tobacco Price Elasticity and Tax Progressivity in Moldova"

Core Content

This working paper examines the tobacco price elasticity of demand in Moldova and evaluates the distributional impact of tobacco tax increases on income groups. The study uses household budget surveys from 2012 to 2015 to estimate price elasticities and assess the net effect of higher tobacco prices on household expenditures and medical costs.

Main Findings

• Tobacco use is a major cause of mortality and disease in Moldova, particularly among men.
• Tobacco consumption accounts for approximately 1% of monthly household budgets and is a significant factor in health expenditures.
• Tobacco tax increases are effective in reducing consumption, especially among younger and lower-income groups.
• The study finds that the net effect of a tobacco tax increase is progressive, as it reduces medical expenditures more than it increases tobacco costs, thereby benefiting lower-income households.

Key Information

Economic and Health Impact of Tobacco

• Tobacco-related diseases are the leading cause of death in Moldova, with 57.6% of male mortality and 62.3% of female mortality in 2010 attributed to smoking.
• Premature deaths from tobacco are projected to be 397,000 among 794,000 current smokers.
• Medical costs associated with tobacco use in the U.S. make up 7.6% of total health expenditures, but the study highlights that tobacco-attributed deaths in Moldova account for over 50% of total age-adjusted deaths.

Tobacco Consumption by Income and Age

• Tobacco prevalence is 44.0% among men and 5.6% among women.
• Younger age groups (18–29 and 30–44) show higher price elasticity due to less nicotine dependence, greater peer influence, and lower disposable income.
• Lower-income groups (deciles 1–5) are more sensitive to price changes, as they tend to adjust consumption more significantly.

Tobacco Taxation and Policy

• Tobacco tax increases are considered effective in reducing consumption and increasing government revenue.
• The study uses a partial equilibrium model to assess the distributional effects of a tobacco tax increase.
• The net income effect is calculated as the sum of increased tobacco expenditures and reduced medical expenditures:
  $$
  \text{Income effect} = \text{change in tobacco expenditure} + \text{lower medical expenses}
  $$

Price Elasticity Estimates

• The average tobacco price elasticity in Moldova is estimated at -0.33, which is slightly lower than the elasticities found in other European countries.
• The elasticity varies by income decile, with lower deciles showing higher sensitivity to price changes.
• The confidence interval for the average elasticity is -0.20 to +0.20, with lower-bound and upper-bound estimates reflecting short-term and long-term behavioral responses, respectively.
• The upper-bound elasticity is more representative of the long-term effect, particularly for younger populations who are expected to dominate smoking in the future.

Methodology and Data

• The study uses household budget surveys and national statistical data to estimate real prices and price elasticities.
• Inflation adjustments are applied to ensure real price comparisons over time.
• The elasticity calculations are based on price changes, consumption patterns, and medical cost reductions.
• Limitations include potential endogeneity in household survey data and difficulty in distinguishing between consumption and smuggling.

Policy Implications

• The progressive impact of tobacco tax increases suggests that such policies could be beneficial for lower-income groups.
• The reduction in tobacco consumption leads to lower medical costs, which has a positive effect on income distribution.
• The study recommends further policy analysis and consideration of the long-term impact of tobacco taxation on health and economic outcomes in Moldova.