Abstract
OBJECTIVESTo assess the impact of a simulated tax-induced cigarette price increase on its consumption by different expenditure clusters in Iran.METHODSEmploying consecutive cross sections for cigarette consumption, a two-part model was applied for different expenditure groups.RESULTSA 75% price increase in cigarettes noticeably— as is common in some countries with strong tobacco control policies—reduces current consumption in all five social classes, causing nearly 8% of current male smokers to quit or not to start.CONCLUSIONSFindings of the current study suggest that Iranian policy makers go through to implement tobacco taxation policies to control smoking prevalence, which in turn might lead to a reduction in national healthcare expenditures as well as enhance the global community’s capacity to meet Sustainable Development Goals.
Highlights
Tobacco use is a leading risk factor for premature death and chronic disability [1]
Data from the World Health Organization (WHO) Eastern Mediterranean Region suggest that tobacco taxation has been weakly enforced in Iran so far and taxes as a percentage of retail price were at the lowest level, totaling only 21.7% of the retail prices and there is ample room to raise tobacco taxes
Our empirical results have indicated (1) that the price elasticity of demand for cigarettes is in the range of -0.43 to -0.49, (2) price effects appear to be lowest for the richest quintile, and (3) that income changes have a negligible effect on cigarette demand
Summary
Tobacco use is a leading risk factor for premature death and chronic disability [1]. According to the World Health Organization (WHO) estimate, approximately 7 million preventable deaths are annually attributed to smoking worldwide, with 80% of them occurring in low-income and middle-income countries (LMICs) [2]. The “R” measure of MPOWER focuses on raising taxes on tobacco products, so that tax as a most effective tobacco control measure should be at least 70% of retail sales price [6]. This intervention may play a major part in achieving the target of 30% reduction in the prevalence of adult tobacco use by 2025 based on a 2010 baseline, set by WHO, and paves the way for attaining the sustainable development goal of lowering deaths attributable to non-communicable diseases (NCDs) by 30% by the year 2030 [7].
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