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Shimul SN, Hussain AKMG, Nargis N. Estimating own-price and cross-price elasticity of cigarette consumption by price tiers in Bangladesh. Tob Control 2024; 33:s44-s50. [PMID: 37903559 PMCID: PMC11058103 DOI: 10.1136/tc-2022-057679] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Grants] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 08/08/2022] [Accepted: 10/05/2023] [Indexed: 11/01/2023]
Abstract
OBJECTIVES The overall price elasticity of cigarette consumption in Bangladesh has been studied extensively. The estimates of price elasticity by price tiers are not available in the existing literature. METHODS Using cohort data of nearly 6000 individuals from the International Tobacco Control Bangladesh survey, this study estimated the own-price and cross-price elasticity and income elasticity of cigarette demand by price tiers in Bangladesh. The elasticity was estimated in three stages of consumer decisions: whether to smoke, which brand to smoke and finally, how many cigarettes to smoke per day. The decision to smoke cigarettes and the choice of cigarette brands were modelled using instrumental variable probability regression. The cigarette consumption per day was modelled using seemingly unrelated regression. RESULTS The price elasticity of cigarette smoking prevalence with respect to the price of low-price cigarettes is -0.0487. The total elasticity for low-price cigarette consumption with respect to its own price is -0.1678. The own-price elasticity of smoking intensity of high-priced brands is -0.2512. The cross-price elasticity of low-price cigarette consumption with respect to high-price brand prices is 0.2643. The income elasticity of smoking prevalence overall is 0.0564. The income elasticity of daily consumption of low-price cigarettes is -0.1934 and for high-price cigarettes, it is 1.4044. The total income elasticity is 1.4608 for high-price cigarettes. CONCLUSION A cigarette tax policy that raises the prices of both low-price and high-price brands-but increases prices in the low-price tier at a faster rate than in the high-price tier and increases prices of all brands at a pace faster than income growth-can effectively reduce cigarette consumption in Bangladesh. JEL CODES H29, L66, I18.
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Affiliation(s)
- Shafiun N Shimul
- Institute of Health Economics, University of Dhaka, Dhaka, Bangladesh
- Health Policy and Behavioral Sciences, Georgia State University, Atlanta, Georgia, USA
| | | | - Nigar Nargis
- Tobacco Control Research, American Cancer Society, Atlanta, Georgia, USA
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Huque R, Abdullah SM, Hossain MN, Nargis N. Price elasticity of cigarette smoking in Bangladesh: evidence from the Global Adult Tobacco Surveys (GATS). Tob Control 2024; 33:s51-s58. [PMID: 37553243 PMCID: PMC11187381 DOI: 10.1136/tc-2022-057668] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Grants] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 07/27/2022] [Accepted: 07/29/2023] [Indexed: 08/10/2023]
Abstract
INTRODUCTION The overall prevalence of cigarette smoking has not changed significantly for over a decade in Bangladesh. Raising the price of cigarettes through taxation is an important policy instrument for reducing consumption and achieving public health goals. The price elasticity of cigarette demand is an important parameter for evaluating the effectiveness of raising prices through tax increases in reducing cigarette consumption. The objective of the study was to estimate the price elasticity of cigarette demand in Bangladesh using Global Adult Tobacco Survey 2009 and 2017 data. METHODS Smoking prevalence and smoking intensity were estimated using a two-part model. Endogeneity of prices was minimised using the average consumption-weighted cigarette price in a cluster, for both smokers and non-smokers residing in a specific cluster. RESULTS Cigarette demand was found to be price inelastic and ranged between -0.51 and -0.73. It is also price inelastic across wealth groups and areas of residence in Bangladesh. Although the total price elasticity did not differ considerably between rural and urban locations, it is evident that individuals in the lower-wealth group are more than twice as responsive to price increases as their high-wealth counterparts. CONCLUSION A significant increase in cigarette prices through a tax increase would decrease smoking prevalence and increase tax revenue in Bangladesh. The greater price sensitivity among smokers in lower-wealth groups indicates that a tax-induced cigarette price increase would provide more health benefits to them, thereby contributing to improved health equity.
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Affiliation(s)
- Rumana Huque
- Department of Economics, University of Dhaka, Dhaka, Bangladesh
- Research, ARK Foundation, Dhaka, Bangladesh
| | - S M Abdullah
- Department of Economics, University of Dhaka, Dhaka, Bangladesh
- Research, ARK Foundation, Dhaka, Bangladesh
| | - Md Nazmul Hossain
- Department of Economics, University of Dhaka, Dhaka, Bangladesh
- Research, ARK Foundation, Dhaka, Bangladesh
| | - Nigar Nargis
- Economic and Health Policy Research, American Cancer Society, Washington, District of Columbia, USA
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Huque R, Azad AK, Ahmed N. Own price elasticities of the demand for sugar-sweetened beverages in Bangladesh. BMC Public Health 2024; 24:1020. [PMID: 38609956 PMCID: PMC11010358 DOI: 10.1186/s12889-024-18544-4] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 08/26/2023] [Accepted: 04/07/2024] [Indexed: 04/14/2024] Open
Abstract
BACKGROUND Consumption of sugar-sweetened beverages (SSB) is a major global public health problem. Increasing the price of SSBs through taxation is an effective tool to reduce SSB consumption. Price-elasticity estimates are useful in measuring the effect of taxation on consumption. We estimated the own price elasticities of demand for SSBs in Bangladesh, which will inform how SSB taxes could affect behaviour. METHODS We used Household Income and Expenditure Survey (HIES) 2016 data, which is a nationally representative dataset at the household level across the country and is conducted using stratified random sampling method. Deaton's method was used to estimate the price elasticities for SSBs in Bangladesh. RESULTS We found that the own price elasticity for SSBs varied between - 0.53% to -1.17% by types of SSBs in Bangladesh. The price elasticity for soft drinks was - 1.17, indicating that if the price of soft drinks increases by 10% via taxes, the quantity consumed of these beverages would reduce by 11.7%. CONCLUSION This is the first study that estimates the own price elasticities of demand for SSBs in Bangladesh. Our results suggest to raise SSB prices through increased taxation in order to reduce SSB consumption and ensure public health gains in Bangladesh.
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Affiliation(s)
- Rumana Huque
- ARK Foundation, Flat C3 and C4, House # 6; Road # 109 Gulshan 2, Dhaka, 1212, Bangladesh.
| | - Abul Kalam Azad
- Department of Economics, Social Science Building, University of Dhaka, Nilkhet, Dhaka-1000, Bangladesh
| | - Nasiruddin Ahmed
- ARK Foundation, Flat C3 and C4, House # 6; Road # 109 Gulshan 2, Dhaka, 1212, Bangladesh
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Huesca L, Llamas L, Sobarzo H. Tobacco industry in Mexico: a general equilibrium analysis. Tob Control 2022; 31:s118-s123. [PMID: 35074931 DOI: 10.1136/tobaccocontrol-2021-056864] [Citation(s) in RCA: 1] [Impact Index Per Article: 0.5] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 06/23/2021] [Accepted: 11/29/2021] [Indexed: 11/04/2022]
Abstract
OBJECTIVE Effects of tobacco taxation on employment in Mexico are measured by using an applied general equilibrium model. METHODS The study describes the modelling methodology based on a 2013 social accounting matrix for Mexico, built for analysing the impact of tobacco taxation on employment. Unemployment is treated as an endogenous variable. RESULTS Setting the specific component of the Excise Tax on Production and Services (IEPS) at 1.50 pesos per cigarette would lead to the loss of tobacco-related jobs constituting just 0.1% of all jobs nationally. Revenue from IEPS on tobacco would increase by 49%, while consumption would fall by 26%. This minimal loss of employment can be compensated for if the government invests revenue from IEPS on tobacco in some specific sectors. We show this for the case of the health sector. Far from just reducing cigarette consumption, this tax reform would also create 33 781 jobs with a net gain of 32 285 across different sectors of the economy while only reducing 727 jobs in the tobacco industry in the whole country. CONCLUSION Results suggest the existence of a good margin for increasing tobacco tax beyond the 2020 update of 0.49 pesos per stick. In addition, from a public health point of view, if tobacco tax revenue were allocated as a direct healthcare subsidy this would deliver a double dividend by further discouraging consumption and increasing tobacco tax revenue by almost 50%, with little impact on key macroeconomic variables in Mexico, which could be offset in more dynamic sectors while promoting health, employment and development.
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Affiliation(s)
- Luis Huesca
- Desarrollo Regional, Centro de Investigación en Alimentación y Desarrollo AC, Hermosillo, Sonora, Mexico
| | - Linda Llamas
- Universidad Estatal de Sonora, Hermosillo, Sonora, Mexico
| | - Horacio Sobarzo
- Centro de Estudios Económicos, El Colegio de México AC, Ciudad de Mexico, Delegación Tlalpan, Mexico
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Huque R, Al Azdi Z, Sheikh A, Ahluwalia JS, Mishu MP, Mehrotra R, Ahmed N, Bauld L, Huq SM, Alam SM, Siddiqui F, Choudhury SR, Siddiqi K. Policy priorities for strengthening smokeless tobacco control in Bangladesh: A mixed-methods analysis. Tob Induc Dis 2021; 19:78. [PMID: 34707471 PMCID: PMC8500203 DOI: 10.18332/tid/140826] [Citation(s) in RCA: 3] [Impact Index Per Article: 1.0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Download PDF] [Figures] [Journal Information] [Subscribe] [Scholar Register] [Received: 04/11/2021] [Revised: 06/28/2021] [Accepted: 08/03/2021] [Indexed: 11/24/2022] Open
Abstract
INTRODUCTION Smokeless tobacco (ST) remains poorly regulated in Bangladesh. This study describes the prevalence and trends of ST use in Bangladesh, presents ST-related disease burden, identifies relevant policy gaps, and highlights key implications for future policy and practice for effective ST control in Bangladesh. METHODS We analyzed secondary data from the two rounds (2009 and 2017) of The Global Adult Tobacco Survey, estimated ST-related disease burden, and conducted a review to assess differences in combustible tobacco and ST policies. In addition, we gathered views in a workshop with key stakeholders in the country on gaps in existing tobacco control policies for ST control in Bangladesh and identified policy priorities using an online survey. RESULTS Smokeless tobacco use, constituting more than half of all tobacco use in Bangladesh, declined from 27.2% (25.9 million) in 2009 to 20.6% (22 million) in 2017. However, in 2017, at least 16947 lives and 403460 Disability-Adjusted Life Years (DALYs) were lost across Bangladesh due to ST use compared to 12511 deaths and 324020 DALYs lost in 2010. Policy priorities identified for ST control have included: introducing specific taxes and increasing the present ad valorem tax level, increasing the health development surcharge, designing and implementing a tax tracking and tracing system, standardizing ST packaging, integrating ST cessation within existing health systems, comprehensive media campaigns, and licensing of ST manufactures. CONCLUSIONS Our analysis shows that compared to combustible tobacco, there remain gaps in implementing and compliance with ST control policies in Bangladesh. Thus, contrary to the decline in ST use and the usual time lag between tobacco exposure and the development of cancers, the ST-related disease burden is still on the rise in Bangladesh. Strengthening ST control at this stage can accelerate this decline and reduce ST related morbidity and mortality.
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Affiliation(s)
- Rumana Huque
- Department of Economics, University of Dhaka, Dhaka, Bangladesh.,ARK Foundation, Dhaka, Bangladesh
| | | | - Aziz Sheikh
- Usher Institute, The University of Edinburgh, Edinburgh, United Kingdom
| | - Jasjit S Ahluwalia
- Department of Behavioral and Social Sciences, Alpert Medical School, Brown University School of Public Health, Providence, United States
| | - Masuma P Mishu
- Department of Health Sciences, Faculty of Sciences, University of York, Heslington, United Kingdom
| | - Ravi Mehrotra
- Centre for Health Economics, University of York, York, United Kingdom.,Department of Health Research, India Cancer Research Consortium, New Delhi, India
| | - Nasiruddin Ahmed
- 8 Institute of Governance and Development, BRAC University, Dhaka, Bangladesh
| | - Linda Bauld
- Usher Institute, The University of Edinburgh, Edinburgh, United Kingdom
| | | | | | - Faraz Siddiqui
- Department of Health Sciences, Faculty of Sciences, University of York, Heslington, United Kingdom
| | - Sohel R Choudhury
- Department of Epidemiology and Research, National Heart Foundation Hospital and Research Institute, Dhaka, Bangladesh
| | - Kamran Siddiqi
- Department of Health Sciences, Faculty of Sciences, University of York, Heslington, United Kingdom
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