Equity implications of tobacco taxation: results from WHO FCTC investment cases

BACKGROUND

Across time, geographies and country income levels, smoking prevalence is highest among people with lower incomes. Smoking causes further impoverishment of those on the lower end of the income spectrum through expenditure on tobacco and greater risk of ill health.

METHODS

This paper summarises the results of investment case equity analyses for 19 countries, presenting the effects of increased taxation on smoking prevalence, health and expenditures. We disaggregate the number of people who smoke, smoking-attributable mortality and cigarette expenditures using smoking prevalence data by income quintile. A uniform 30% increase in price was applied across countries. We estimated the effects of the price increase on smoking prevalence, mortality and cigarette expenditures.

RESULTS

In all but one country (Bhutan), a one-time 30% increase in price would reduce smoking prevalence by the largest percent among the poorest 20% of the population. All income groups in all countries would spend more on cigarettes with a 30% increase in price. However, the poorest 20% would pay an average of 12% of the additional money spent.

CONCLUSIONS

Our results confirm that health benefits from increases in price through taxation are pro-poor. Even in countries where smoking prevalence is higher among wealthier groups, increasing prices can still be pro-poor due to variable responsiveness to higher prices. The costs associated with higher smoking prevalence among the poor, together with often limited access to healthcare services and displaced spending on basic needs, result in health inequality and perpetuate the cycle of poverty.

The equitable impact of sugary drink taxation structures on sugary drink consumption among Canadians: a modelling study using the 2015 Canadian Community Health Survey-Nutrition

OBJECTIVE

Estimate the impact of 20 % flat-rate and tiered sugary drink tax structures on the consumption of sugary drinks, sugar-sweetened beverages and 100 % juice by age, sex and socio-economic position.

DESIGN

We modelled the impact of price changes - for each tax structure - on the demand for sugary drinks by applying own- and cross-price elasticities to self-report sugary drink consumption measured using single-day 24-h dietary recalls from the cross-sectional, nationally representative 2015 Canadian Community Health Survey-Nutrition. For both 20 % flat-rate and tiered sugary drink tax scenarios, we used linear regression to estimate differences in mean energy intake and proportion of energy intake from sugary drinks by age, sex, education, food security and income.

SETTING

Canada.

PARTICIPANTS

19 742 respondents aged 2 and over.

RESULTS

In the 20 % flat-rate scenario, we estimated mean energy intake and proportion of daily energy intake from sugary drinks on a given day would be reduced by 29 kcal/d (95 % UI: 18, 41) and 1·3 % (95 % UI: 0·8, 1·8), respectively. Similarly, in the tiered tax scenario, additional small, but meaningful reductions were estimated in mean energy intake (40 kcal/d, 95 % UI: 24, 55) and proportion of daily energy intake (1·8 %, 95 % UI: 1·1, 2·5). Both tax structures reduced, but did not eliminate, inequities in mean energy intake from sugary drinks despite larger consumption reductions in children/adolescents, males and individuals with lower education, food security and income.

CONCLUSIONS

Sugary drink taxation, including the additional benefit of taxing 100 % juice, could reduce overall and inequities in mean energy intake from sugary drinks in Canada.

Environmental regulation and corporate tax avoidance-Evidence from China

In this study, we used a difference-in-difference (DID) approach to analyze the effect of environmental regulation on corporate tax avoidance behavior based on China’s carbon emissions trading pilot policy of 2013. Our findings were as follows: (1) Environmental regulation has led companies to adopt further tax evasion behaviors. Furthermore, the core conclusion was confirmed after a series of robust and endogenous tests, such as parallel trends and PSM-DID (propensity score matching-difference-in-difference). (2) Environmental regulations increase tax avoidance activities by reducing corporate cash flows. (3) The influence of environmental regulation on firm tax evasion is highly pronounced among non-state-owned enterprises, big-scale enterprises, and enterprises with a high degree of industry competition.

Linking a sugar-sweetened beverage tax with fruit and vegetable subsidies: A simulation analysis of the impact on the poor

BACKGROUND

US individuals, particularly from low-income subpopulations, have very poor diet quality. Policies encouraging shifts from consuming unhealthy food towards healthy food consumption are needed.

OBJECTIVES

We simulate the differential impacts of a national sugar-sweetened beverage (SSB) tax and combinations of SSB taxes with fruit and vegetable (FV) subsidies targeted to low-income households on SSB and FV purchases of lower and higher SSB purchasers.

METHODS

We considered a 1-cent-per-ounce SSB tax and 2 FV subsidy rates of 30% and 50% and used longitudinal grocery purchase data for 79,044 urban/semiurban US households from 2010-2014 Nielsen Homescan data. We used demand elasticities for lower and higher SSB purchasers, estimated via longitudinal quantile regression, to simulate policies' differential effects.

RESULTS

Higher-SSB-purchasing households made larger reductions (per adult equivalent) in SSB purchases than lower SSB purchasers due to the tax (e.g., 4.4 oz/day at SSB purchase percentile 90 compared with 0.5 oz/day at percentile 25; P < 0.05). Our analyses by household income indicated low-income households would make larger reductions than higher-income households at all SSB purchase levels. Targeted FV subsidies induced similar, but nutritionally insignificant, increases in FV purchases of low-income households, regardless of their SSB purchase levels. Subsidies, however, were effective in mitigating the tax burdens. All low-income households experienced a net financial gain when the tax was combined with a 50% FV subsidy, but net gains were smaller among higher SSB purchasers. Further, low-income households with children gained smaller net financial benefits than households without children and incurred net financial losses under a 30% subsidy rate.

CONCLUSIONS

SSB taxes can effectively reduce SSB consumption. FV subsidies would increase FV purchases, but nutritionally meaningful increases are limited due to low purchase levels before policy implementation. Expanding taxes beyond SSBs, providing larger FV subsidies, or offering subsidies beyond FVs, particularly for low-income households with children, may be more effective.

Evaluation of Changes in Grams of Sugar Sold After the Implementation of the Seattle Sweetened Beverage Tax

IMPORTANCE

Adults and children routinely exceed recommended intake amounts of added sugars established by dietary guidelines. Taxes are used as a policy tool to reduce demand for sugar-sweetened beverages (SSBs) given consumption-related adverse health outcomes but may induce substitution to other sources of added sugars.

OBJECTIVE

To examine the extent to which changes in grams of sugar sold from taxed beverages may be offset by changes in grams of sugar sold from untaxed beverages, sweets, and stand-alone sugar after the implementation of the Seattle, Washington, Sweetened Beverage Tax (SBT) on January 1, 2018.

DESIGN, SETTING, AND PARTICIPANTS

This study used difference-in-differences analyses to examine changes in grams of sugar sold from taxed and untaxed products in Seattle compared with Portland, Oregon, at year 1 and year 2 post tax. This study used Nielsen scanner data from supermarkets and mass merchandise as well as grocery, drug, convenience, and dollar stores on unit sales and measurements for beverage and food product universal product codes (UPCs) for each site for the pretax period (January 8-December 30, 2017) and the corresponding weeks in year 1 post tax (2018) and in year 2 post tax (2019). Nutritional analyses assessed grams of sugar for each UPC. The analytical balanced sample included 1326 taxed beverage UPCs, 239 untaxed beverage UPCs, 2054 sweets UPCs, and 81 stand-alone sugar UPCs. Statistical analysis was performed from January to August 2021.

EXPOSURES

Implementation of the Seattle SBT.

MAIN OUTCOMES AND MEASURES

Changes in grams of sugar sold from taxed beverages, untaxed beverages, sweets, and stand-alone sugar.

RESULTS

At both year 1 and year 2 post tax in Seattle compared with Portland, grams of sugar sold from taxed beverages decreased 23% (year 2 posttax ratio of incidence rate ratios [RIRR] = 0.77; 95% CI, 0.73-0.80). Sugar sold from untaxed beverages increased at year 1 post tax by 4% (RIRR = 1.04; 95% CI, 1.00-1.07) with no change at year 2 post tax. Sugar sold from sweets increased by 4% at both year 1 and year 2 post tax (year 2 posttax RIRR = 1.04; 95% CI, 1.03-1.06). There were no changes in stand-alone sugar sold.

CONCLUSIONS AND RELEVANCE

This study using difference-in-differences analysis found a net 19% reduction in grams of sugar sold from taxed SSBs at year 2 post tax after accounting for changes in sugar sold from untaxed beverages, sweets, and stand-alone sugar. These results suggest that SSB taxes may effectively yield permanent reductions in added sugars sold from SSBs in food stores.

Welfare states as lifecycle redistribution machines: Decomposing the roles of age and socio-economic status shows that European tax-and-benefit systems primarily redistribute across age groups

Social scientists identify two core functions of modern welfare states as redistribution across (a) socio-economic status groups (Robin Hood) and (b) 'the lifecycle' (the piggy bank). But what is the relative importance of these functions? The answer has been elusive, as the piggy bank is metaphorical. The intra-personal time-travel of resources it implies is based on non-quid-pro-quo transfers. In practice, 'lifecycle redistribution' must operate through inter-age-group resource reallocation in cross-section. Since at any time different birth cohorts live together, 'resource-productive' working-aged people are taxed to finance consumption of 'resource-dependent' younger and older people. In a novel decomposition analysis, we study the joint distribution of socio-economic status, age, and respectively (a) all cash and in-kind transfers ('benefits'), (b) financing contributions ('taxes'), and (c) resulting 'net benefits,' on a sample of over 400,000 Europeans from 22 EU countries. European welfare states, often maligned as ineffective Robin Hood vehicles riddled with Matthew effects, are better characterized as inter-age redistribution machines performing a more important second task rather well: lifecycle consumption smoothing. Social policies serve multiple goals in Europe, but empirically they are neither primarily nor solely responsible for poverty relief and inequality reduction.

Association of a Sweetened Beverage Tax With Purchases of Beverages and High-Sugar Foods at Independent Stores in Philadelphia

IMPORTANCE

The relationship between a sweetened beverage tax and changes in the prices and purchases of beverages and high-sugar food is understudied in the long term and in small independent food retail stores where sugar-sweetened beverages are among the most commonly purchased items.

OBJECTIVE

To examine whether a 1.5 cent-per-fluid-ounce excise tax on sugar- and artificially sweetened beverages Philadelphia, Pennsylvania, was associated with sustained changes in beverage prices and purchases, as well as calories purchased from beverages and high-sugar foods, over 2 years at small independent stores.

DESIGN, SETTING, AND PARTICIPANTS

This cross-sectional study used a difference-in-differences approach to compare changes in beverage prices and purchases of beverages and high-sugar foods (candy, sweet snacks) at independent stores in Philadelphia and Baltimore, Maryland (a nontaxed control) before and 2 years after tax implementation, which occurred on January 1, 2017. Price comparisons were also made to independent stores in Philadelphia's neighboring counties.

MAIN OUTCOMES AND MEASURES

Changes in mean price (measured in cents per fluid ounce) of taxed and nontaxed beverages, mean fluid ounces purchased of taxed and nontaxed beverages, and mean total calories purchased from beverages and high-sugar foods.

RESULTS

Compared with Baltimore independent stores, taxed beverage prices in Philadelphia increased 2.06 cents per fluid ounce (95% CI, 1.75 to 2.38 cents per fluid ounce; P < .001), with 137% of the tax passed through to prices 2 years after tax implementation, while nontaxed beverage prices had no statistically significant change. A total of 116 independent stores and 4738 customer purchases (1950 [41.2%] women; 4351 [91.8%] age 18 years or older; 1006 [21.2%] White customers, 3185 [67.2%] Black customers) at independent stores were assessed for price and purchase comparisons. Purchases of taxed beverages declined by 6.1 fl oz (95% CI, -9.9 to -2.4 fl oz; P < .001), corresponding to a 42% decline in Philadelphia compared with Baltimore; there were no significant changes in purchases of nontaxed beverages. Although there was no significant moderation by neighborhood income or customer education level, exploratory stratified analyses revealed that declines in taxed beverage purchases were larger among customers shopping in low-income neighborhoods (-7.1 fl oz; 95% CI, -13.0 to -1.1 fl oz; P = .001) and individuals with lower education levels (-6.9 fl oz; 95% CI, -12.5 to -1.3 fl oz; P = .001).

CONCLUSIONS AND RELEVANCE

This cross-sectional study found that a tax on sweetened beverages was associated with increases in price and decreases in purchasing. Beverage excise taxes may be an effective policy to sustainably decrease purchases of sweetened drinks and calories from sugar in independent stores, with large reductions in lower-income areas and among customers with lower levels of education.

The effects of tobacco taxation and pricing on the prevalence of smoking in Africa

BACKGROUND

Tobacco use continues to kill millions of people globally, making it one of the major causes of preventable deaths. Notwithstanding, there has been a very marginal fall in the prevalence of tobacco smoking in Africa. Since taxes (hence prices) are part of the main measures suggested to decrease the demand for tobacco products, this study investigates how tobacco taxation and pricing influence the prevalence of smoking in 24 African countries.

METHODS

Using panel data on 24 African countries sourced from the World Health Organization (WHO) and the World Bank databases for the period 2010 to 2016, this study employs the system Generalized Method of Moments (GMM) estimator to investigate the effects of tobacco taxation and pricing on the prevalence of smoking. The system GMM estimator is used due its ability to deal with potential endogeneity of tobacco taxation and pricing: the likelihood that the prevalence of smoking can influence tobacco taxation and pricing which may lead to biased estimates.

RESULTS

Tobacco taxation and pricing have negative significant effects on the prevalence of smoking among the selected countries after controlling for growth of Gross Domestic Product (GDP) per capita, urbanization, death rate and net inflows of Foreign Direct Investment (FDI). Specifically, a percentage increase in tobacco price is found to decrease the prevalence of smoking by between 0.11 to 0.14%, while a percentage increase in tobacco tax decreases the prevalence of smoking by between 0.25 to 0.36%, all at 1% level of significance.

CONCLUSION

Since tobacco taxation and pricing are found to have negative significant effects on the prevalence of smoking, the implication is that, their use can be intensified by African policy makers towards achieving the WHO Framework Convention on Tobacco Control (FCTC) recommended targets and hence decrease the prevalence of tobacco smoking in Africa. Doing so may therefore help in achieving the Sustainable Development Goal (SDG) 3.5 (prevention and treatment of substance abuse), thereby reducing the colossal number of smoking attributable deaths.

Tobacco taxes and illicit cigarette trade in Colombia

This paper estimates the short-term impact of a twofold increase of the tobacco excise tax on consumption of illicit cigarette trade in Colombia. Using data collected before and after the tax increase from a novel smoker survey (DEICS-Col), the impact is estimated as the change in the probability that a smoker has illicit cigarettes. The methodology follows a difference-in-differences strategy, measuring the year-to-year variation of the proportion of illicit cigarettes between smokers who report buying low-priced cigarettes (the highest treatment intensity) and those who bought high-priced cigarettes (lowest treatment intensity). Estimations of the impact show an average increase of 4-5 percentage points on the proportion of illicit cigarettes relative to an initial penetration of low-priced illicit cigarettes of nearly 5.1 %.

Taxation and tobacco plain packaging effect on Saudi smokers quitting intentions in Riyadh city, Saudi Arabia

OBJECTIVES

The current research aims to study the impact of raising tobacco tax and implementation of plain packaging on male smokers' quitting intentions in Saudi Arabia.

METHODS

The study adopts a quantitative approach where close-ended questionnaires are distributed among 1,015 male participants from different regions of Riyadh city, Saudi Arabia. Bivariate analysis and logistic regression analysis are conducted using SPSS software to analyze the collected primary data.

RESULTS

The study found a significant association of taxation and plain packaging on the quitting intentions of smokers. On taxation, while a considerable number of participants (46.5%) stated that they would not quit smoking if the cigarette prices increased, participants who were planning to give up smoking said it would strengthen their intention (p less than 0.001). In addition, logistic regression was performed to identify the independent predictors of quitting intention. Participants who did not want to apply the concept of plain packaging to Saudi Arabia were more likely to have quitting intention (odds ratio: 2.30 [1.61-3.28]) in comparison to those who wanted to apply the concept.

CONCLUSION

Although the current price of cigarette packs reported to be very high by the participants, imposing a new higher tax may motivate smokers who had plans to quit in the near future. Plain packaging seems to be an effective new strategy in addition to tobacco taxation in Saudi Arabia, yet, more time and further research are required to assess the effectiveness of the strategy.

The pass-through of alcohol excise taxes to prices in OECD countries

Tax pass-through rates to prices measure how much prices increase when taxes are increased by one unit, which will in turn determine the effectiveness of taxation policies in reducing substance use. Using longitudinal data of alcohol prices and excise taxes from 27 Organization for Economic Cooperation and Development (OECD) countries from 2003 to 2016, we estimate the tax pass-through rates to prices for a variety of alcoholic beverages-beer (1.24; 95% CIs: [0.67, 1.81]), wine (2.4; 95% CIs: [1.7, 3.11]), Cognac (1.71; 95% CIs: [1.07, 2.35]), Gin (0.85; 95% CIs: [0.34, 1.35]), Scotch whisky (1.14; 95% CIs: [0.52, 1.75]), and Liqueur Cointreau (1.98; 95% CIs: [1.21, 2.76]). While excise taxes on wine, Cognac, and Liqueur Cointreau are over-shifted to prices, taxes on Gin are exact- or under-shifted. Excise taxes on beer and Scotch whisky are likely over-shifted to prices, but the tax pass-through rates for these beverages are not significantly different from 1 and we cannot completely rule out exact pass-through of taxes to prices. The tax pass-through to prices for most beverage types is also higher for higher-priced products. Dynamic model further shows a lagged impact of wine and beer taxes on prices, indicating pricing strategies that may target lower-priced beer and wine.

Is the public sweet on sugary beverages? Social desirability bias and sweetened beverage taxes

Social desirability bias has been documented in self-reported diet as well as in voting behavior, but not in regards to sweetened beverage consumption or sweetened beverage taxes. We find evidence that respondents in a mixed-mode opinion survey exhibit social desirability bias in both reported sweetened beverage consumption and beliefs about the health and economic benefits of sweetened beverage taxes. We do so in a study of 1704 adults residing in Seattle, Minneapolis, and the D.C. metro area. Phone respondents in our survey under-report sweetened beverage consumption by 0.63 beverages per week relative to web respondents (average web respondent consumption is 3.55 beverages per week). They also over-report their beliefs about the positive health and economic impacts of sweetened beverage taxes by 0.54 points in an 18-point index (average web respondent index score is 2.79). These differences are measured after we control for selection into survey mode by using matching methods, and we interpret them as occurring due to social desirability bias. In contrast to these findings, there is no modal difference in respondents' stated approval of sweetened beverage taxes, and so we conclude that this question is not subject to social desirability bias.

Association between tax on sugar sweetened beverages and soft drink consumption in adults in Mexico: open cohort longitudinal analysis of Health Workers Cohort Study

OBJECTIVE

To examine changes in categories of soft drink consumption in a cohort of Mexican adults, three years after the implementation of the sugar sweetened beverage tax.

DESIGN

Open cohort longitudinal analysis.

SETTING

Three waves of the Health Workers Cohort Study, Mexico, spanning 2004 to 2018.

PARTICIPANTS

1770 people aged 19 years or older with information on drinks consumption available in at least one of the three cohort waves.

MAIN OUTCOME MEASURE

Change in probability of belonging to one of four categories of soft drinks consumption (non, low, medium, high) after the tax was implemented. Heterogeneity of associations by income and education was also assessed.

RESULTS

Before the implementation of the tax, more than 50% of the participants were medium and high consumers of soft drinks and less than 10% were in the non-consumer category. After the tax was implemented, 43% of the population was categorised as medium or high consumers and the prevalence of non-consumers increased to 14%. Three years after implementation of the tax on 1 January 2014, the probability of being a non-consumer of soft drinks increased by 4.7 (95% confidence interval 0.3 to 9.1) percentage points and that of being a low consumer increased by 8.3 (0.6 to 16.0) percentage points compared with the pre-tax period. Conversely, the probability of being in the medium and high levels of soft drinks consumption decreased by 6.8 (0.5 to 13.2) percentage points and 6.1 (0.4 to 11.9) percentage points, respectively. No significant heterogeneity of the tax across income levels was observed, but stronger effects of the tax were seen in participants with secondary school education or higher, compared with those with elementary school or less.

CONCLUSIONS

The Mexican sugar sweetened beverage tax was associated with a reduction in the probability of consuming soft drinks in this cohort of employees from a healthcare provider. The results cannot be extrapolated to the Mexican population, but they suggest that three years after implementation, the tax had helped to increase the proportion of people who do not consume soft drinks while decreasing the proportion of high and medium consumers.

The Rise and Fall of Alcohol Excise Taxes in U.S. States, 1933-2018

OBJECTIVE

Higher alcohol taxation is protective against alcohol-related morbidity and mortality. All states have specific (volume-based) excise taxes for alcohol that decrease if not adjusted for inflation. These taxes have diminished substantially in real terms since their inception after National Prohibition in the United States. The purpose of this study was to examine trends in the magnitude and frequency of changes in state specific excise taxes to document their erosion.

METHOD

Alcohol excise tax data were examined for all 50 states from 1933 to 2018. Tax data were obtained from the Alcohol Policy Information System, Pacific Institute for Research and Evaluation, Wine Institute, and HeinOnline. Linear and logistic regression analyses were conducted for beer, wine, and distilled spirits taxes to examine trends in the frequency and inflation-adjusted magnitude of changes in taxes from the year of alcohol tax inception.

RESULTS

From 1933 until 1970, beer, wine, and distilled spirits tax rates increased in value compared with inception rates, but by 2018 alcohol taxes had declined 66%, 71%, and 70%, respectively, compared with their inception values. The erosion of taxes after 1970 was driven primarily by declines in the magnitude of tax increases through the 1970s and 1980s, followed by declines in the frequency of tax increases in subsequent decades.

CONCLUSIONS

The value of alcohol excise taxes has declined since 1970 from both insufficient tax increases and later infrequent tax increases. Laws that index rates to inflation could sustain the public health benefit of reduced morbidity and mortality resulting from higher alcohol tax rates.

The impact of the Cook County, IL, Sweetened Beverage Tax on beverage prices

This study assessed the extent to which the Cook County, IL, Sweetened Beverage Tax (SBT) of one cent per ounce (oz) on sugar-sweetened and artificially sweetened beverages was passed on to consumers in the form of higher prices. We drew on universal product code-level store scanner data and used a pre-post intervention-comparison site difference-in-differences (DID) study design to estimate the impact of the Cook County SBT on prices of taxed beverages, across product categories and sizes, as well as on prices of untaxed beverages. The DID model results showed an over-shifting of the tax with a 119% pass-through rate, on average, across all taxed beverages in Cook County compared to its comparison site. This price change represented, on average, a 34% increase in prices of taxed beverages. For untaxed beverages, prices were estimated to increase slightly by 0.04 cents per oz driven mainly by an increase in milk prices (0.12 cents per oz). We also found some heterogeneity in tax pass-through for the taxed beverages by sweetened beverage product category and size with pass-through being higher, on average, for individual-size (126%) compared to family-size (117%) beverages and higher for energy drinks (145%) compared to other sweetened beverages. Based on the baseline prices of different categories and sizes of beverages, the effective percentage increase in beverage prices resulting from the Cook County SBT ranged from a 52% increase for family-size soda to a 10% increase for family-size energy drinks.

The effect of implicit and explicit taxes on the purchasing of 'high-in-calorie' products: A randomized controlled trial

Public health taxes on less healthy food and beverage products have been shown to be effective in various settings. However, it is unclear if observed reductions in the quantity of taxed products purchased is a result of price increases due to the tax or the accompanying messaging and if the effects are influenced by the level of support for such taxes within the population. 941 adults residing in Singapore were randomized and asked to shop in one of four versions of a fully functional on-line experimental grocery store: 1) no tax control; 2) implicit tax showing only post-tax prices (i.e., 20 % higher than control prices) on high-in-calorie products; 3) fake tax showing pre-tax prices and a label falsely indicating that the price includes a 20 % tax on high-in-calorie products; and 4) explicit tax showing the same label as in 3) and an actual 20 % price increase applied to the high-in-calorie products. The proportion of high-in-calorie products purchased was 14 % in the control arm. We were unable to reject the null hypothesis of no effect in the implicit tax arm compared to control (0.08, 95 % CI -3.31 to 1.77) or in the fake tax arm compared to the control (2.59, 95 % CI -5.04 to 0.00) but observed a statistically significant 3.35 percentage point decrease (95 % CI -6.01 to -0.5) in the explicit tax arm compared to control. We were unable to reject the null hypothesis of no effect in any of the outcomes related to diet quality. Individuals who support the tax showed greater responsiveness to the explicit and fake taxes compared to those who do not (price elasticities of demand of -1.38 and -0.51 respectively). Results suggest that reductions in the proportions of high-in-calorie products purchased may be largely attributable to explicit messaging rather than to price increases. However, even when effective, policymakers should recognize that changes in purchasing patterns may not improve diet quality and that results may not generalize to other areas where levels of support differ.

The impact of Seattle's Sweetened Beverage Tax on beverage prices and volume sold

On January 1, 2018 the city of Seattle, WA, implemented a 1.75-cent per ounce (oz) Sweetened Beverage Tax (SBT) on sugar-sweetened beverages with at least 40 calories per 12 oz. This study drew on universal product code-level store scanner data and used a pre-post intervention-comparison site difference-in-differences (DID) study design to assess the impact of the SBT on taxed beverage prices in Seattle, the volume sold of taxed beverages in Seattle and in its 2-mile border area (cross-border shopping), and the volume sold of untaxed beverages (substitution) relative to changes in its comparison site of Portland, OR. The DID results showed that, on average, in the first year post-tax implementation, prices of taxed beverages rose by 1.03 cents per oz (p < 0.001) corresponding to a 59% tax pass-through rate. Volume sold of taxed beverages fell, on average, by 22% (p < 0.001) in the first year following the implementation of the tax. Volume sold of taxed beverages fell to a greater extent for family- versus individual-size beverages (31% versus 10%) and fell to a greater extent for soda (29%) compared to all other beverage types. Moderate substitution to untaxed beverages was found - volume sold of untaxed beverages increased by 4% (p < 0.05). The results revealed no significant increases in the overall volume sold of taxed beverages in the 2-mile border area of Seattle relative to its comparison site suggesting that tax avoidance in the form of cross-border shopping did not dampen the impact of the tax.

Oakland's sugar-sweetened beverage tax: Impacts on prices, purchases and consumption by adults and children

Several cities in the U.S. have implemented taxes on sugar-sweetened beverages (SSBs) in an attempt to improve public health and raise revenue. On July 1, 2017, Oakland introduced a tax of one cent per ounce on SSBs. In this paper, we estimate the impact of the tax on retail prices, product availability, purchases, and child and adult consumption of taxed beverages in Oakland, as well as of potential substitute beverages. We collected data from Oakland stores and their customers and a matched group of stores in surrounding counties and their customers. We collected information in the months prior to the implementation of the tax and again a year later on: (1) prices, (2) purchase information from customers exiting the stores, and (3) a follow-up household survey of adults and child beverage purchases and consumption. We use a difference-in-differences identification strategy to estimate the impact of the tax on prices, purchases, and consumption of taxed beverages. We find that roughly 60 percent of the tax was passed on to consumers in the form of higher prices. There was a slight decrease in the volume of SSBs purchased per shopping trip in Oakland and a small increase in purchases at stores outside of the city, resulting in a decrease in purchases of 11.33 ounces per shopping trip that is not statistically significant. We find some evidence of increased shopping by Oakland residents at stores outside of the city. We do not find evidence of substantial changes in the overall consumption of SSBs or of added sugars consumed through beverages for either adults or children after the tax.

Do prices and purchases respond similarly to soft drink tax increases and cuts?

While in January 2012, Denmark increased the long-standing tax on sugary soft drinks, the tax was cut by half in July 2013 and then completely repealed in January 2014. In this study, we examine whether increases and cuts of the soft drink tax lead to similar over- or under-shifting to prices and to similar demand responses. We use longitudinal scanner data of 1,282 Danish households to estimate within-product changes in prices and within-household changes in purchase quantity. The tax hike was overshifted by a factor of 1.6-1.8, while the tax repeal was fully passed through with a factor of 0.9-1.2. On average, consumption was 13.4 percent lower the year after the tax increase compared to the year before. The repeal of the tax was associated with an increase in purchase quantity of 31.0 percent. This is equivalent to price elasticities of -1.3 for both tax hikes and cuts. The results suggest that consumers react similarly to tax cuts compared to tax increases. Furthermore, the increase in purchases following a tax cut has no limiting effect on purchases of other beverages suggesting an increase in the intake of calories. This might have implications for health in countries that consider repealing current taxes on soft drinks.

The impact of UK soft drinks industry levy on manufacturers' domestic turnover

In March 2016, the UK government announced the Soft Drinks Industry Levy (SDIL) which came into effect in April 2018. In common with the reaction to sugar-sweetened beverage (SSB) taxes in other countries, the SDIL announcement was met with strong industry opposition, with claims that it would harm their profits. The SDIL was designed to incentivise reformulation of SSBs by providing a 2-year delay between the announcement and the enforcement of the levy, and adopting a two-tiered rate based on the sugar content of the drinks. Using interrupted time series analysis, this paper examines how the domestic turnover of UK soft drinks manufacturers changed after the announcement and the implementation of the SDIL. Our results show some evidence of a short-term negative impact of the SDIL announcement on the domestic turnover of the UK soft drinks manufacturers. This effect, however, did not continue post-implementation. These findings suggest that manufacturers were, to a large extent, able to mitigate the effects of levy before it came into effect.

The macroeconomic impacts of diet-related fiscal policy for NCD prevention: A systematic review

BACKGROUND

Diet-related fiscal policies are effective interventions to address non-communicable disease. However, despite these being economic policy instruments, there is little public health attention given to the evidence of macroeconomic impacts. This review aims to assess the global evidence for the macroeconomic impact of diet-related fiscal policies for non-communicable disease prevention on industry revenue, government revenue and employment.

METHODS

For this systematic review we comprehensively searched the bibliographic databases MEDLINE, OvidSP, EMBASE, Global Health, SCOPUS, CINAHL and ECONLIT, and Google Scholar for English peer-reviewed studies or grey literature, with no date cut-off. Global interventions with a focus on diet-related fiscal strategies were assessed for the outcomes of industry revenue, gross domestic product, government revenue and employment. We excluded non-English papers.

FINDINGS

Eleven studies met the inclusion criteria. All studies were on sugar sweetened beverage taxation and one also included an energy-dense food tax. Nine were modelling studies and two used interrupted time series analysis based on empirical evidence. One study found potential employment increases because of taxation; two found no significant job losses and eight found reduced employment. Taxes reduced sales volume and revenue within the sugar/beverage industry. Government revenue generation was positive in all studies. One study considered redistribution of consumer and government spending to other goods and services; INTERPRETATION: We found no robust evidence for negative macroeconomic impacts of diet-related fiscal policies, likely a reflection of the limited methodology used in the analyses. This review suggests that there is a need for more high-quality research into the macroeconomic impacts of diet related fiscal measures and similar to tobacco taxation, government should consider directing revenue generated towards complementary measures to generate employment and/or provide livelihood training for those affected.

Tobacco industry pricing undermines tobacco tax policy: A tale from Bangladesh

The effectiveness of tax increase in reducing tobacco use depends on the extent to which the industry passes on the tax to consumers. Evidence suggests that tobacco industry may absorb or raise the price more than the tax increase depending on the price segment of tobacco products. In this paper, we examined the industry's pricing strategy by price segment of the cigarette market in Bangladesh by observing the deviation between the market retail prices (MRP) of cigarettes faced by consumers and government recommended retail prices (RRP) used as tax base in a four-tiered ad valorem tax structure. The RRPs by brands were collected from government sources. The MRPs by brands were collected by the International Tobacco Control Bangladesh Wave 3 Survey 2011-12 and Wave 4 Survey 2014-15. Applying linear regression to the deviation of MRP from RRP by price tiers, we found MRPs were higher than RRPs for higher-price brands allowing extra profit margin from the high end while lowering the relative price of and expanding demand for cheaper brands. Bangladesh cigarette industry adopted a differential pricing strategy that undermined the intended effect of tax policy change in reducing cigarette consumption and improving public health. This pricing strategy was supported by the tiered excise tax structure which should be replaced with a uniform specific excise system. In the face of growing cigarette affordability, it is crucial that the specific tax be increased routinely by an amount that induces cigarette price increases large enough to make cigarettes less affordable over time.

Standardised packaging, minimum excise tax, and RYO focussed tax rise implications for UK tobacco pricing

BACKGROUND

Standardised packaging for factory made (FM) and roll your own (RYO) tobacco was fully implemented in the UK in May 2017. Around the same time, several changes to the tax system were applied (a Minimum Excise Tax (MET) for FM products and tax increases weighted towards RYO products). The tobacco industry claims that standardised packaging will lower prices (a disincentive for quitting) by commoditising the product, yet had itself taken advantage of the previous tax regime to achieve large profits from premium brands while also keeping some products' prices relatively low. Here we evaluate the impact of standardised packaging, the MET and the RYO focussed tax changes on price and industry profitability.

METHODS AND FINDINGS

Nielsen electronic point of sale (EPOS) data (May 2015 to April 2018) were used to calculate real (inflation adjusted) monthly price per stick overall, by cigarette type (FM and RYO) and by seven market segments. Trend estimation, using additive mixed models, assessed weighted average price (weighted by volume of sales) and tobacco industry net revenue changes. The beginning and end of the data series were compared in terms of: (a) average monthly price growth, (b) average monthly net revenue growth, and (c) undershifting and overshifting patterns after tax changes. FM and RYO real prices changed little over the 3-year period-overall prices rose by about 1p per stick. There was no evidence of commoditisation with prices of all FM segments (but not RYO) rising faster after the implementation of standardised packaging than immediately beforehand. The prices of the cheapest FM brands rose with the implementation of the MET. RYO price increases did not close the gap to FM pricing levels despite RYO focussed tax increases. Tax changes following the implementation of standardised packaging and the MET were more widely and quickly passed on to smokers in the form of higher prices than the tax change pre-implementation. The main limitations are first that because we do not know the exact mechanism by which Nielsen scales up sample data to provide UK estimates, we could only use data for a set three year period during which the same adjustments are made. Second, the tax and standardised packaging events were sometimes too close in time to separate their consequences statistically. Third, tobacco prices may also be affected by external factors such as changes in smokers' disposable income or availability of electronic nicotine delivery systems.

CONCLUSIONS

There was no long-term lowering of tobacco prices after the implementation of standardised packaging as predicted by the industry. The introduction of the MET was successful in increasing the price of the cheapest FM cigarettes and narrowing the price gap between FM brands. The RYO tax increases were, however, insufficient to narrow the price gap between RYO and FM. Overall, undershifting became less extensive indicating that tobacco industry manipulation of the tax system which had previously kept cheap products available had declined. This suggests that standardised packaging and a MET will likely contribute to further declines in UK tobacco use.

Changes in alcohol and cigarette consumption in response to medical and recreational cannabis legalization: Evidence from U.S. state tax receipt data

BACKGROUND

Whether medical or recreational cannabis legalization impacts alcohol or cigarette consumption is a key question as cannabis policy evolves, given the adverse health effects of these substances. Relatively little research has examined this question. The objective of this study was to examine whether medical or recreational cannabis legalization was associated with any change in state-level per capita alcohol or cigarette consumption.

METHODS

Dependent variables included per capita consumption of alcohol and cigarettes from all 50 U.S. states, estimated from state tax receipts and maintained by the Centers for Disease Control and National Institute for Alcohol Abuse and Alcoholism, respectively. Independent variables included indicators for medical and recreational legalization policies. Three different types of indicators were separately used to model medical cannabis policies. Indicators for the primary model were based on the presence of active medical cannabis dispensaries. Secondary models used indicators based on either the presence of a more liberal medical cannabis policy ("non-medicalized") or the presence of any medical cannabis policy. Difference-in-difference regression models were applied to estimate associations for each type of policy.

RESULTS

Primary models found no statistically significant associations between medical or recreational cannabis legalization policies and either alcohol or cigarette sales per capita. In a secondary model, both medical and recreational policies were associated with significantly decreased per capita cigarette sales compared to states with no medical cannabis policy. However, post hoc analyses demonstrated that these reductions were apparent at least two years prior to policy adoption, indicating that they likely result from other time-varying characteristics of legalization states, rather than cannabis policy.

CONCLUSION

We found no evidence of a causal association between medical or recreational cannabis legalization and changes in either alcohol or cigarette sales per capita.

The downstream effects of state tobacco control policies on maternal smoking during pregnancy and birth outcomes

BACKGROUND

Research has demonstrated that the implementation of tobacco control policies is associated with improved birth outcomes. Ascertainment of prenatal smoking on the US birth certificate has changed over the past decade to record smoking across each trimester.

METHODS

Using 2005-2015 birth certificate data on 26,436,541 singletons from 47 states and DC linked to state-level cigarette taxes and smoke-free legislation, we conducted conditional mixed-process models to examine the impact of tobacco control policies on prenatal smoking and quitting, then on the associated changes in birth outcomes. We included interactions between race/ethnicity, education, and taxes and present average marginal effects.

RESULTS

Among white and black mothers with less than a high school degree, 36.0% and 14.1%, respectively, smoked during the first trimester and their babies had the poorest birth outcomes. However, they were the most responsive to cigarette taxes. Every $1.00 increase in taxes was associated with a 3.45 percentage point decrease in prenatal smoking among white mothers and a 1.20 percentage point decrease among black mothers. These reductions translated to increases in birth weight by 4.19 g for babies born to white mothers and 0.89 g for babies born to black mothers. Among smokers, there was some evidence that taxes increased quitting and improved birth outcomes, although most associations were not statistically significant. We found limited effects of smoke-free legislation on smoking, quitting or birth outcomes.

CONCLUSIONS

Cigarette taxes continue to have important downstream effects on reducing prenatal smoking and improving birth outcomes among the most vulnerable mothers and infants.

The impact of the French soda tax on prices and purchases. An ex post evaluation

We estimate the price and consumption effects of the 2012 French tax on sweetened non-alcoholic drinks using a difference-in-difference approach. Our identification strategy exploits Italian data as a natural control group. We use French and Italian Consumer Price Indices, purchase prices and quantities from the 2011 and 2012 Kantar and GfK home-scan surveys for two French regions and two neighbouring Italian regions, and expenditure data from the 2011 and 2012 Italian Expenditure Survey. We check for the robustness of our results by applying the difference-in-difference models using only French data and considering water as the benchmark (control) good. We find that the tax is transmitted to the prices of taxed drinks, with full transmission for soft drinks and partial transmission for fruit juices. The evidence on purchase responses is mixed and less robust, indicating at most a very small reduction in soft drink purchases (about half a litre per capita per year), an impact which would be consistent with the low tax rate. We find suggestive evidence of a larger response by the sub-sample of heavy purchasers. Fruit juices and water do not seem to have been affected by the tax.

The productivity gains associated with a junk food tax and their impact on cost-effectiveness

Objective

To estimate the productivity impacts of a policy intervention on the prevention of premature mortality due to obesity.

Methods

A simulation model of the Australian population over the period from 2003 to 2030 was developed to estimate productivity gains associated with premature deaths averted due to an obesity prevention intervention that applied a 10% tax on unhealthy foods. Outcome measures were the total working years gained, and the present value of lifetime income (PVLI) gained. Impacts were modelled over the period from 2003 to 2030. Costs are reported in 2018 Australian dollars and a 3% discount rate was applied to all future benefits.

Results

Premature deaths averted due to a junk food tax accounted for over 8,000 additional working years and a $307 million increase in PVLI. Deaths averted in men between the ages of 40 to 59, and deaths averted from ischaemic heart disease, were responsible for the largest gains.

Conclusions

The productivity gains associated with a junk food tax are substantial, accounting for almost twice the value of the estimated savings to the health care system. The results we have presented provide evidence that the adoption of a societal perspective, when compared to a health sector perspective, provides a more comprehensive estimate of the cost-effectiveness of a junk food tax.

State-Level Affordability of Factory-Made Cigarettes among Current US Smokers: Findings from the ITC US Survey, 2003-2015

Cigarette affordability measures the price smokers pay for cigarettes in relation to their incomes. Affordability can be measured using the relative income price of cigarettes (RIP), or the price smokers pay to purchase 100 packs of 20 cigarettes divided by their per capita household income. Using longitudinal data from 7046 smokers participating in the International Tobacco Control (ITC) US Survey, the purpose of this study was to test whether affordability significantly changed following the US federal tax increase implemented on 1 April 2009. This study also estimated temporal trends in affordability from 2003-2015 at state and national levels using small area estimation methods and segmented linear mixed effects regression models. RIP increased slightly during 2003-2008. This was followed by a 30% increase during 2008-2010, indicating cigarettes were less affordable after the federal tax increase. RIP continued to increase during 2010-2013 but decreased during 2013-2015, suggesting cigarettes have recently become more affordable for US smokers. State-level trends in RIP were consistent with overall national trends. Controlling for other factors, a $1 increase in the state excise tax was significantly associated with a 9% increase in RIP, indicating state taxes reduced affordability. Tax-induced price increases must keep pace with underlying economic conditions to ensure cigarettes do not become more affordable over time.

The effects of alcohol pricing policies on consumption, health, social and economic outcomes, and health inequality in Australia: a protocol of an epidemiological modelling study

INTRODUCTION

Alcohol use and misuse are associated with substantial health and social issues in Australia and internationally. Pricing policy is considered as one of the most effective means to reduce risky drinking and related harms. This protocol paper describes a study that will model and estimate the effects, effectiveness and cost-benefit of alcohol pricing policy initiatives in reducing risky drinking, health and social harms, and health inequalities among subpopulations in Australia.

METHODS AND ANALYSIS

The study is a modelling and epidemiological study using data from various resources, such as survey, previous literatures and response agencies. A number of statistical procedures will be undertaken to evaluate the impact of different alcohol pricing policy initiatives on various outcomes, including alcohol consumption in population subgroups, and health and social problems, and to measure health inequalities and cost-effectiveness of those proposed pricing policies, such as a 10% tax increase on all alcohol beverages or introduction of a minimum unit price.

ETHICS AND DISSEMINATION

The ethics approval of this study was obtained from the College Human Ethics Sub-Committee of the La Trobe University on 9 November 2017 (Ref: S17-206). While examining the heterogeneous effects of price policy across population subgroups, this study will provide the first comprehensive estimates of the likely impacts of alcohol price changes on health inequalities. The study will also provide sophisticated economic analyses of the impact of price policy changes, which is critical information for policy makers and will assist policy makers in directing resources to a more efficient alcohol strategy. Results will be made available to communities and societies, health departments and other researchers.

Effects of changes to the taxation of beer on alcohol consumption and government revenue in Australia

BACKGROUND

In 1988, the Australian government introduced a single nominal rate of tax on all beer products calculated on alcohol content. However, in 2000/01, varying nominal rates of tax were introduced for beer products according to three alcohol content levels (low-/mid-/high-strength) and container type (on-/off-premises). Little is known about the effect of the different tax policies on alcohol consumption and government revenue.

METHODS

We undertake time series analysis over 1989-2016 to examine the effect of beer tax policies in two sub-periods (before/after 2000/01) on category-level beer consumption per capita and government revenue. We also test if the policy changes in 2000/01 had immediate or long-term effects on total (all beer category) consumption over 1989-2016. Data includes monthly domestic beer sales volumes by category (in litres of alcohol), monthly government revenue from beer tax (AUD$), and inflation-adjusted tax rates (AUD$ per litre of alcohol).

RESULTS

Before 2000/01, the single nominal tax rate had a significant positive effect on revenue, but no significant effect on consumption. After 2000/01, the relatively higher nominal tax rates for two beer categories (mid- and high-strength off-premises) had a significant negative effect on their consumption, and a significant negative effect on revenue in one category (mid-strength off-premises). However, across the full period examined (1989-2016), the level and slope of total beer consumption was not significantly affected by the tax policy changes in 2000/01.

CONCLUSION

Raising alcohol taxes has the potential to reduce consumption and increase government revenue, but has been underutilised for these public health and public finance objectives in Australia.

Do beer and wine respond to price and tax changes in Vietnam? Evidence from the Vietnam Household Living Standards Survey

OBJECTIVE

To provide the first ever published estimates of the price and expenditure elasticities of demand for beer and wine in Vietnam and thereby contribute to policy initiatives aimed at reducing the excessive consumption of alcohol.

METHODS

We use a linear approximation of the Almost Ideal Demand System and data from the Vietnam Household Living Standards Survey for 2010, 2012 and 2014.

RESULTS

We find that the demand for beer and wine in Vietnam is price and expenditure inelastic with average price elasticities of -0.283 and -0.317 and average expenditure elasticities of 0.401 and 0.156, respectively. That is, we find that beer and wine consumption decline whenever their respective prices increase and their consumption increases whenever expenditure rises.

CONCLUSIONS

The results of the study lend confidence to calls for increased taxation of alcoholic products on public health grounds in Vietnam.

Cost-Effectiveness of a US National Sugar-Sweetened Beverage Tax With a Multistakeholder Approach: Who Pays and Who Benefits

OBJECTIVES

To estimate the health impact and cost-effectiveness of a national penny-per-ounce sugar-sweetened beverage (SSB) tax, overall and with stratified costs and benefits for 9 distinct stakeholder groups.

METHODS

We used a validated microsimulation model (CVD PREDICT) to estimate cardiovascular disease reductions, quality-adjusted life years gained, and cost-effectiveness for US adults aged 35 to 85 years, evaluating full and partial consumer price pass-through.

RESULTS

From health care and societal perspectives, the SSB tax was highly cost-saving. When we evaluated health gains, taxes paid, and out-of-pocket health care savings for 6 distinct consumer categories, incremental cost-effectiveness ratios ranged from $20 247 to $42 662 per quality-adjusted life year for 100% price pass-through (incremental cost-effectiveness ratios similar with 50% pass-through). For the beverage industry, net costs were $0.92 billion with 100% pass-through (largely tax-implementation costs) and $49.75 billion with 50% pass-through (largely because of partial industry coverage of the tax). For government, the SSB tax positively affected both tax revenues and health care cost savings.

CONCLUSIONS

This stratified analysis improves on unitary approaches, illuminating distinct costs and benefits for stakeholders with political influence over SSB tax decisions.

Impact of maternal income on the risk of gestational diabetes mellitus in primiparous women

AIMS

Findings concerning the impact of socio-economic status on the risk of gestational diabetes mellitus (GDM) are inconclusive and little is known about the simultaneous impact of income and educational attainment on the risk of GDM. This study aims to assess the impact of maternal prepregnancy income in combination with traditional GDM risk factors on the incidence of GDM in primiparous women.

METHODS

This is an observational cohort study including 5962 Finnish women aged ≥ 20 years from the city of Vantaa, Finland, who delivered for the first time between 2009 and 2015, excluding women with pre-existing diabetes mellitus. The Finnish Medical Birth Register, Finnish Tax Administration, Statistics Finland, Social Insurance Institution of Finland and patient healthcare records provided data for the study. We divided the study population according to five maternal income levels and four educational attainment levels.

RESULTS

Incidence of GDM decreased with increasing income level in primiparous women (P < 0.001 for linearity, adjusted for smoking, age, BMI and cohabiting status). In an adjusted two-way model, the relationship was significant for both income (P = 0.007) and education (P = 0.039), but there was no interaction between income and education (P = 0.52).

CONCLUSIONS

There was an inverse relationship between both maternal prepregnancy taxable income and educational attainment, and the risk of GDM in primiparous Finnish women.

The association between excise tax structures and the price variability of alcoholic beverages in the United States

Recent tobacco taxation research suggests that excise tax structure plays an important role in the effectiveness of increasing taxes in reducing consumption. However, evidence on excise tax structures of alcoholic beverages is scarce. We linked price variability measures for beer, wine, and liquor in the US derived using Economist Intelligence Unit city data from 2003 to 2016 with state-level excise tax structures from the Alcohol Policy Information System. Ordinary least squares (OLS) regressions were performed to assess the associations between excise tax structures and price variability, for beer, wine, and liquor (spirits), respectively. Results suggest that, compared with a specific excise beer tax structure based on volumes, a mixed structure with both specific and ad valorem components was associated with 38% (p≤0.01) greater beer price variability. In addition, a mixed excise tax structure for liquor was associated with 60–77% (p≤0.01) greater liquor price variability. However, these associations do not imply a causal link between tax structures and price variability. In summary, a mixed excise tax structure is associated with greater variability in beer and liquor prices, an indicator for tax avoidance opportunities. Future research is needed to identify the causal impact of tax structures on price variability.

The relationship between cigarettes and electronic cigarettes: Evidence from household panel data

We use the Nielsen Consumer Panel to investigate the impact of tobacco control policies on purchases of electronic cigarettes (e-cigarettes), cigarettes, and smoking cessation products. We measure product quantity, product type, nicotine content, and liquid volume of e-cigarettes, and product quantity and nicotine content of cigarettes. Higher cigarette excise taxes decrease both cigarette and e-cigarette purchases, suggesting that cigarettes and e-cigarettes are complements, and higher cigarette excise taxes reduce the aggregate amount of nicotine purchased from cigarettes and e-cigarettes. Cigarette smoke-free air laws decrease cigarette purchases, while e-cigarette smoke-free air laws do not affect cigarette or e-cigarette purchases.

Sugar-Sweetened Beverage Demand and Tax Simulation for Federal Food Assistance Participants: A Case of Two New England States

BACKGROUND

Excessive consumption of sugar-sweetened beverages is a major concern in the efforts to improve diet and reduce obesity in USA, particularly among low-income populations. One of the most commonly proposed strategies to reduce sugar-sweetened beverage consumption is increasing beverage prices through taxation.

OBJECTIVE

The objective of this study was to evaluate whether and how price-based policies could reduce sugar-sweetened beverage consumption among participants in the federal Supplemental Nutrition Assistance Program.

METHODS

Using point-of-sale data from a regional supermarket chain (58 stores), we estimated the responsiveness of demand to sugar-sweetened beverage price changes among Supplemental Nutrition Assistance Program-participating families with young children. Own-price and cross-price elasticities for non-alcoholic beverages were estimated using a Quadratic Almost Ideal Demand System model.

RESULTS

The study found evidence that a tax-induced sugar-sweetened beverage price increase would reduce total sugar-sweetened beverage purchases among Supplemental Nutrition Assistance Program participants, who were driven by purchase shifts away from taxed sodas and sports drinks to non-taxed beverages (bottled water, juice, milk). The substitution of non-taxed caloric beverages decreases the marginal effects of the sugar-sweetened beverage tax, yet the direct tax effects are large enough to reduce the overall caloric intake, with the average net reduction in monthly calories from sugar-sweetened beverages estimated at around 8% for a half-cent per ounce tax and 16% for a one cent per ounce tax.

CONCLUSION

A beverage price increase in the form of an excise tax would reduce sugar-sweetened beverage consumption and increase healthier beverage purchases among low-income families.

Estimating the public economic consequences of introducing varenicline smoking cessation therapy in South Korea using a fiscal analytic framework

BACKGROUND AND AIMS

Smoking gives rise to many cross-sectorial public costs and benefits for government. Costs arise from increased healthcare spending and work-related social benefits, while smoking itself provides significant revenue for government from tobacco taxes. To better understand the public economic impact of smoking and smoking cessation therapies, this study developed a government perspective framework for assessing smoking-attributable morbidity and mortality and associated public costs. This framework includes changes in lifetime tax revenue and health costs, as well as changes in tobacco tax revenue, from fewer smokers.

METHODS

A modified generational accounting framework was developed to assess relationships between smoking-attributable morbidity and mortality and public economic consequences of smoking, including lifetime tax revenue gains/losses, government social transfers, and health spending. Based on the current prevalence of smoking in South Korean males, a cohort model was developed for smokers, former-smokers, and never-smokers. The model simulated the lifetime discounted fiscal transfers for different age cohorts in 5 year age bands, and the return on investment (ROI) from smoking cessation therapy.

RESULTS

Former smokers are estimated to generate higher lifetime earnings and direct tax revenues and lower lifetime healthcare costs due to the reduction of smoking-attributable mortality and morbidity compared to smokers, even after accounting for reduced tobacco taxes paid. Based on the costs of public investments in varenicline, this study estimated a ROI from 1.4-1.7, depending on treatment age, with higher ROI in younger cohorts, with an average ROI of 1.6 for those aged less than 65.

CONCLUSIONS

This analysis suggests that reductions in smoking can generate positive public economic benefits for government, even after accounting for lost tobacco tax revenues. The results described here are likely applicable to countries having similar underlying smoking prevalence, comparable taxation rates, and social benefit protection provided to individuals with smoking-related conditions.

Impact of tobacco control policies on adolescent smokeless tobacco and cigar use: a difference-in-differences approach

BACKGROUND

While increasing cigarette taxes has been a major policy driver to decrease smoking, taxes on other tobacco products have received less attention. Our aims were to evaluate the impact of chewing tobacco/cigar taxes, cigarette taxes, and smoke-free legislation on adolescent male and female use of smokeless tobacco and cigars.

METHODS

We analyzed data on 499,381 adolescents age 14-18 years from 36 US states in the Youth Risk Behavior Surveys (1999-2013) linked to state-level tobacco control policies. We conducted difference-in-differences regression models to assess whether changes in taxes and the enactment of smoke-free legislation were associated with smokeless tobacco use and, separately, cigar use. Models were stratified by adolescent sex.

RESULTS

We found that chewing tobacco taxes had no effect on smokeless tobacco use and cigar taxes had no effect on cigar use. In contrast, among males a 10% increase in cigarette taxes was associated with a 1.0 percentage point increase (0.0010, 95% CI 0.0003-0.0017) in smokeless tobacco use. A 10% increase in cigarette taxes was also associated with a 1.5 percentage point increase (0.0015, 95% CI 0.0006-0.0024) in cigar use among males and a 0.7 percentage point increase (0.0007, 95% CI 0.0001-0.0013) in cigar use among females. There was some evidence that smoke-free legislation was associated with an 1.1 percentage point increase (0.0105, 95% CI 0.0015-0.0194) in smokeless tobacco use among males only, but no effect of smoke-free legislation on cigar use for males or females.

CONCLUSIONS

Higher state cigarette taxes are associated with adolescents' use of cheaper, alternative tobacco products such as smokeless tobacco and cigars. Reducing tobacco use will require comprehensive tobacco control policies that are applied equally to and inclusive of all tobacco products.

Sugary drinks taxation, projected consumption and fiscal revenues in Colombia: Evidence from a QUAIDS model

The global shift towards diets high in sugar-sweetened beverages (SSBs) is linked to higher prevalence of obesity, diabetes and most other non-communicable diseases. In Colombia, one out of every two people was overweight or obese by 2010. This study estimates price-elasticities from a Quadratic Almost Ideal Demand System model, using the 2006-2007 Colombian Income and Expenditure survey. The food groups that were jointly considered were: unsweetened unflavored milks; coffee and tea; sugar sweetened beverages (SSBs); sweets and candies (including sugar); dairy products; meats and animal-based products; grains based staples; fruits and vegetables; and condiments and snacks. We take into account the high proportion of households not purchasing specific food and beverage groups (censored data) and endogeneity on both prices (as unit values) and total expenditure. Unhealthy beverages are price-elastic (-1.61 for SSBs) meaning that the change in consumption is proportionally larger with respect to a change in price. Also, there is a high complementarity among SSBs and major food groups (grains, meats and fruits and vegetables). In Colombia, the design of a meaningful tax to influence healthier diets is a next critical step. This study also shows that a tax of 20% on SSBs should prove to be effective, and can yield revenues of about 1% of the Colombian government's total annual fiscal revenue, which can potentially be directed towards public health promotion and investments.

Employment changes associated with the introduction of taxes on sugar-sweetened beverages and nonessential energy-dense food in Mexico

We assessed changes in employment in the manufacturing industry, the commercial sector and national unemployment rates, associated with the fiscal policies implemented in 2014 in Mexico: a 1 peso per liter excise tax to sugar-sweetened beverages (SSB) and an 8% tax on nonessential energy-dense food. We used data from three nationally representative surveys. Controlling for contextual variables, we used interrupted time series analyses to model changes in number of employees in the SSB and nonessential energy-dense food industry, in commercial establishments selling beverages and food and changes in national unemployment rates. Our results show that there were no significant changes in employment associated with the taxes in the manufacturing industries (for beverages and nonessential energy-dense food). We found a very small increasing trend in the post-tax period for employment in commercial stores and a decreasing trend in the unemployment rate. However, these changes are negligible and unlikely to be caused by the implementation of the taxes. In conclusion, there were no employment reductions associated with the fiscal policies implemented in Mexico in 2014 on SSB and nonessential energy-dense food.

Cigarette Taxes, Smoking-and Exercise?

This research provides the first in-depth analysis of the effect that increased cigarette taxes have on exercise behavior. Smoking may diminish the ability to exercise; individuals may also use exercise to compensate for the harmful health effects of smoking or to avoid gaining weight if they cut back. Our conceptual model highlights these and several other avenues for effect and reveals that the predicted effect of cigarette costs on exercise behavior is theoretically ambiguous. To investigate the relationship empirically, 1994-2012 data from the behavioral risk factor surveillance system are combined with state level cigarette tax rates and other state level variables. Several measures of both smoking and exercise behavior are created and estimated in reduced form models. Our results suggest that both smoking and exercise are reduced by cigarette taxes. However, the effects on exercise may be more complicated as we find that certain groups, such as young adults or those who have recently quit smoking, are affected differently. Our analyses also show that the responsiveness of both smoking and exercise behavior to cigarette costs is much smaller in the 2000s, an era of high-tax increases. Copyright © 2016 John Wiley & Sons, Ltd.

Policy lessons from health taxes: a systematic review of empirical studies

BACKGROUND

Taxes on alcohol and tobacco have long been an important means of raising revenues for public spending in many countries but there is increasing interest in using taxes on these, and other unhealthy products, to achieve public health goals. We present a systematic review of the research on health taxes, and aim to generate insights into how such taxes can: (i) reduce consumption of targeted products and related harms; (ii) generate revenues for health objectives and distribute the tax burden across income groups in an efficient and equitable manner; and (iii) be made politically sustainable.

METHODS

Six scientific and four grey-literature databases were searched for empirical studies of 'health taxes' - defined as those intended to increase the costs of manufacturing, distributing, retailing and/or consuming health-damaging products. Since reviews already exist of the evidence relating to traditional alcohol and tobacco excise taxes, we focus on other taxes such as taxes on retailers and manufacturers of unhealthy products, and consumer taxes targeting unhealthy foods, such as sugar-sweetened beverages.

RESULTS

Ninety-one peer-reviewed and 11 grey-literature studies met our inclusion criteria. The review highlights a recent, rapid rise in research in this area, most of which focuses on high-income countries and on taxes on food products or nutrients. Findings demonstrate that high tax rates on sugar-sweetened beverages are likely to have a positive impact on health behaviours and outcomes, and, while taxes on products reduce demand, they add to fiscal revenues. Common concerns about health taxes are also discussed.

CONCLUSIONS

If the primary policy goal of a health tax is to reduce consumption of unhealthy products, then evidence supports the implementation of taxes that increase the price of products by 20% or more. However, where taxes are effective in changing health behaviours, the predictability of the revenue stream is reduced. Hence, policy actors need to be clear about the primary goal of any health tax and frame the tax accordingly - not doing so leaves taxes vulnerable to hostile lobbying. Conversely, earmarking health taxes for health spending tends to increase public support so long as policymakers follow through on specified spending commitments.

SYSTEMATIC REVIEW REGISTRATION NUMBER

CRD42016048603.

State political ideology, policies and health behaviors: The case of tobacco

Anti-smoking campaigns are widely viewed as a success case in public health policy. However, smoking rates continue to vary widely across U.S. states and the success of anti-smoking campaigns is contingent upon states' adoption of anti-smoking policies. Though state anti-smoking policy is a product of a political process, studies of the effect of policies on smoking prevalence have largely ignored how politics shapes policy adoption, which, in turn, impact state health outcomes. Policies may also have different effects in different political contexts. This study tests how state politics affects smoking prevalence both through the policies that states adopt (with policies playing a mediating role on health outcomes) or as an effect modifier of behavior (tobacco control policies may work differently in states in which the public is more or less receptive to them). The study uses publicly available data to construct a time-series cross-section dataset of state smoking prevalence, state political context, cigarette excise taxes, indoor smoking policies, and demographic characteristics from 1995 to 2013. Political ideology is measured using a validated indicator of the ideology of state legislatures and of the citizens of a state. We assess the relationship between state political context and state smoking prevalence rates adjusting for demographic characteristics and accounting for the mediating/moderating role of state policies with time and state fixed effects. We find that more liberal state ideology predicts lower adult smoking rates, but that the relationship between state ideology and adult smoking prevalence is only partly explained by state anti-smoking policies.

Economic implications of tobacco industry in India: An overview

Tobacco usage has become engraved in the cultural practices of our country since time immemorial. With increased demand comes increased production, employment, and growth of the tobacco industry but for a deadly cost of human lives which fall prey to its use in either forms. In this article, we describe the economic burden faced by the country due to the emerging tobacco epidemic. The need of the hour is to understand the impact faced due to the tobacco industry in the country and to bring in appropriate efforts to reduce loss of economy and human lives.

The costs of diabetes among Australians aged 45-64 years from 2015 to 2030: projections of lost productive life years (PLYs), lost personal income, lost taxation revenue, extra welfare payments and lost gross domestic product from Health&WealthMOD2030

OBJECTIVES

To project the number of people aged 45-64 years with lost productive life years (PLYs) due to diabetes and related costs (lost income, extra welfare payments, lost taxation revenue); and lost gross domestic product (GDP) attributable to diabetes in Australia from 2015 to 2030.

DESIGN

A simulation study of how the number of people aged 45-64 years with diabetes increases over time (based on population growth and disease trend data) and the economic losses incurred by individuals and the government. Cross-sectional outputs of a microsimulation model (Health&WealthMOD2030) which used the Australian Bureau of Statistics' Survey of Disability, Ageing and Carers 2003 and 2009 as a base population and integrated outputs from two microsimulation models (Static Incomes Model and Australian Population and Policy Simulation Model), Treasury's population and labour force projections, and chronic disease trends data.

SETTING

Australian population aged 45-64 years in 2015, 2020, 2025 and 2030.

OUTCOME MEASURES

Lost PLYs, lost income, extra welfare payments, lost taxation revenue, lost GDP.

RESULTS

18 100 people are out of the labour force due to diabetes in 2015, increasing to 21 400 in 2030 (18% increase). National costs consisted of a loss of $A467 million in annual income in 2015, increasing to $A807 million in 2030 (73% increase). For the government, extra annual welfare payments increased from $A311 million in 2015 to $A350 million in 2030 (13% increase); and lost annual taxation revenue increased from $A102 million in 2015 to $A166 million in 2030 (63% increase). A loss of $A2.1 billion in GDP was projected for 2015, increasing to $A2.9 billion in 2030 attributable to diabetes through its impact on PLYs.

CONCLUSIONS

Individuals incur significant costs of diabetes through lost PLYs and lost income in addition to disease burden through human suffering and healthcare costs. The government incurs extra welfare payments, lost taxation revenue and lost GDP, along with direct healthcare costs.

Update on Performance in Tobacco Control: A Longitudinal Analysis of the Impact of Tobacco Control Policy and the US Adult Smoking Rate, 2011-2013

CONTEXT

Tobacco use remains the leading cause of preventable death in the United States. States and municipalities have instituted a variety of tobacco control measures (TCMs) to address the significant impact tobacco use has on population health. The American Lung Association annually grades state performance of tobacco control using the State of Tobacco Control grading framework.

OBJECTIVE

To gain an updated understanding of how recent efforts in tobacco control have impacted tobacco use across the United States, using yearly State of Tobacco Control TCM assessments.

DESIGN

The independent TCM variables of smoke-free air score, cessation score, excise tax, and percentage of recommended funding were selected from the American Lung Association State of Tobacco Control reports. Predictors of adult smoking rates were determined by a mixed-effects model.

SETTING/PARTICIPANTS

The 50 US states and District of Columbia.

MAIN OUTCOME MEASURE

Adult smoking rate in each state from 2011 to 2013.

RESULTS

The average adult smoking rate decreased significantly from 2011 to 2013 (21.3% [SD: 3.5] to 19.3% [SD: 3.5], P = .016). All forms of TCMs varied widely in implementation levels across states. Excise taxes (β = -.812, P = .006) and smoke-free air regulations (β = -.057, P = .008) were significant, negative predictors of adult smoking. Cessation services (β = .015, P = .46) did not have a measurable effect on adult smoking.

CONCLUSION

Tobacco control measures with the strongest influence on adult smoking include the state excise tax and state smoke-free air regulations. The lack of robust funding for tobacco cessation services across the majority of US states highlights an important shortfall in current tobacco control policy.

Reduction in emergency department visits for children's asthma, ear infections, and respiratory infections after the introduction of state smoke-free legislation

Despite the benefits of smoke-free legislation on adult health, little is known about its impact on children's health. We examined the effects of tobacco control policies on the rate of emergency department (ED) visits for childhood asthma (N=128,807), ear infections (N=288,697), and respiratory infections (N=410,686) using outpatient ED visit data in Massachusetts (2001-2010), New Hampshire (2001-2009), and Vermont (2002-2010). We used negative binomial regression models to analyze the effect of state and local smoke-free legislation on ED visits for each health condition, controlling for cigarette taxes and health care reform legislation. We found no changes in the overall rate of ED visits for asthma, ear infections, and upper respiratory infections after the implementation of state or local smoke-free legislation or cigarette tax increases. However, an interaction with children's age revealed that among 10-17-year-olds state smoke-free legislation was associated with a 12% reduction in ED visits for asthma (adjusted incidence rate ratios (aIRR) 0.88; 95% CI 0.83, 0.95), an 8% reduction for ear infections (0.92; 0.88, 0.97), and a 9% reduction for upper respiratory infections (0.91; 0.87, 0.95). We found an overall 8% reduction in ED visits for lower respiratory infections after the implementation of state smoke-free legislation (0.92; 0.87, 0.96). The implementation of health care reform in Massachusetts was also associated with a 6-9% reduction in all children's ED visits for ear and upper respiratory infections. Our results suggest that state smoke-free legislation and health care reform may be effective interventions to improve children's health by reducing ED visits for asthma, ear infections, and respiratory infections.

Tax credit boosts healthcare services in remote areas of Hawaii

The Lana'i Community Health Center, which treats about half of the island's 3,200 residents, will accommodate an additional 600 to 800 patients every year.