Cigarette Tax Research Articles

Policy compatibility: How anti‐smoking policy shapes state vaping policy innovation

AbstractLimited attention has been paid to how previous policies affect subsequent policy innovation. This article addresses this question by examining whether U.S. states with higher cigarette taxes are more likely to adopt e‐cigarette taxes and impose higher rates. The concept of policy compatibility, divided into normative and operational compatibility, is used to connect these policies. First, states with higher cigarette taxes are hypothesized to be more likely to adopt e‐cigarette taxes. This is because high cigarette tax rates indicate a preference for strong tobacco regulation, which is normatively compatible with regulating e‐cigarettes. States with high cigarette tax rates are also expected to choose high e‐cigarette tax rates. Such states, even if imposing higher e‐cigarette taxes, can maintain a similar or even larger price gap between cigarettes and e‐cigarettes, compared to those with low cigarette taxes. By doing so, they can not only reduce vaping effectively but also continuously provide smokers with a strong economic incentive to switch to e‐cigarettes. This indicates that such policies are operationally compatible with existing cigarette tax goals—reducing smoking and nicotine‐related health risks. The empirical findings support both hypotheses, offering insight into how past policies shape policy adoption.

Better cigarette tax policies and higher tobacco excise tax revenues

BackgroundIn November 2021, the Tobacconomics team published the second edition of the Cigarette Tax Scorecard which evaluates cigarette taxation in each country based on four components—cigarette price, affordability change, tax...

The African cigarette price data landscape: an overview of gaps and opportunities

IntroductionAfrica has the lowest cigarette taxes of any region. Price data are needed to produce evidence that informs tax policy change.ObjectiveTo locate and describe datasets that provide information on cigarette...

State cigarette taxes, smoking cessation, and implications for the educational gradient in mortality

BackgroundRecent studies suggest that state policy, such as cigarette tax policy, is associated with variation in the educational gradient in mortality. However, it is unknown whether state cigarette taxes moderate the educational gradient in mortality directly by incentivizing smoking cessation. MethodsThis study uses 20 years of survey data from the Panel Study of Income Dynamics (N = 89,127 person-years; 751 deaths) merged with administrative data to examine the potential for a single state policy, cigarette taxes, to moderate the education-mortality association through influence on smoking cessation. ResultsIn mortality analyses, higher cigarette taxes are associated with a weaker educational gradient in mortality among smokers and overall. Smoking cessation analyses show higher state cigarette taxes increase the odds of quitting only for low-educated smokers, such that each $1 increase in taxes results in an additional 0.4 to 1 life years for low-educated smokers. For more educated subgroups, the association between state cigarette taxes and smoking cessation is confounded by broader temporal trends. DiscussionState cigarette taxes have potential to weaken the educational gradient in mortality by attenuating educational disparities in smoking cessation, however their direct effect is only on low-educated smokers. The findings help demonstrate how fundamental cause associations are contingent on state policy and vary over time.

To What Extent Are Taxes on Cigarettes Effective and How Does the Impact of These Taxes Affect Across Income Groups?

In this project, it will analyze the effectiveness of cigarette taxes and their impact on consumers of different income levels. The nature of cigarettes and the factors that determine the effectiveness of cigarette taxes will be considered, as well as the risks that cigarettes and cigarette taxes will bring. In particular, it will explore how consumers of lower and higher income, are impacted differently. In academic literature there is significant debate over the effectiveness or cigarette taxes. This paper will contribute to this debate by considering the impact of cigarette taxes on smokers of different income level from their perspectives. In this study, my goal is to demonstrate the effectiveness of cigarette taxes varies across income groups. Specifically, this paper will investigate the economic rationale for cigarette taxes, how the impact of these taxes varies across income groups, and the causes of this variation in effectiveness. The rest for this paper will be organized as follows. The introduction will present the background and importance related to this paper. The literature review will survey the current debate on cigarette tax effectiveness and will summarize the evidence. The discussion section will: explain why cigarettes need to be taxed, study the price elasticity of cigarettes and how this determines the impact of the tax on smoking level, and discuss how high- income and low-income groups are affected by cigarette taxes, differently. The conclusion will summarize the research findings and outline areas for future work.

Cigarette taxation and consumption in The Czech Republic. Have these factors influenced tax revenue?

Cigarette taxation and consumption in The Czech Republic. Have these factors influenced tax revenue?

Extent of illicit cigarette sales in Nepal: findings from a retail survey

IntroductionIncreasing the tax on cigarettes is widely considered the most effective method to reduce its consumption. However, Nepal has a low cigarette tax as policymakers in Nepal are concerned about...

Association between current cigarette prices and cessation behaviors among male adult smokers: findings from 2018 to 2020 ITC Vietnam surveys

BackgroundThis study evaluated the impact of the tax increase in January 2019 on changes in intention to quit and the effect of cigarette prices on quit attempts and successful quitting among male cigarette smokers in Vietnam.MethodsData were derived from the ITC project in Vietnam, which included 1585 adult smokers at baseline (Wave 1, Aug-Oct 2018) followed up to waves 2 (Sep-Nov 2019) and 3 (Sep-Dec 2020). Generalized estimating equations regression was performed to estimate changes in the intention to quit. Multiple logistic regression analysis was used to evaluate the cigarette price of a cigarette pack in relation to quit attempts and successful quitting.ResultsThe increase in cigarette tax in 2019 did not significantly increase the likelihood of the intention to quit. After the tax increase, 63.6% of participants who smoked made a quit attempt, and 27.6% successfully quit smoking in the follow-up waves. However, the price of a cigarette pack was not significantly associated with quit attempts and successful quitting. The study did not observe a significant impact of cigarette prices on quit attempts and successful quitting in all subgroups of household income. Factors associated with quit attempts included the number of cigarettes smoked and the intention to quit, while those associated with successful quitting included age, dual use of cigarettes and other tobacco products, and the intention to quit.ConclusionCurrent cigarette prices were not associated with cessation behaviors even within the lowest household income group. Therefore, a sharp rise in cigarette tax is required to incentivize smokers to quit smoking.

Tobacco industry pricing strategies during recent tax adjustments in Mexico: evidence from sales data

IntroductionPrevious studies have identified pricing strategies that the tobacco industry employs to try to minimise the impact of tobacco taxation, but these studies are mostly about high-income countries. This research...

Estimating own-price and cross-price elasticity of cigarette consumption by price tiers in Bangladesh

ObjectivesThe 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.MethodsUsing cohort data...

Beyond the smoke: Historical analysis of the revenue implications of state cigarette tax policies, 1989 to 2019

IntroductionWhile cigarette taxes are a vital tobacco control tool, their impact on cigarette tax revenue has been largely understudied in the extant literature. This study examines how the level of cigarette taxes affects the revenue generated from cigarettes in the United States over a thirty-year period. MethodsWe obtained the Tax Burden Data from the Centers for Disease Control and Prevention (1989–2019). Our dependent variables were gross cigarette tax revenue and per capita gross cigarette tax revenue, and our independent variable was state tax per pack. We used two-way fixed effects to estimate the relationship between state cigarette tax revenue and cigarette taxes, adjusting for state-level sociodemographic characteristics, state-fixed effects, and time trends. ResultsThe study reveals that raising cigarette state tax by 10 % led to a 7.2 % to 7.5 % increase in cigarette tax revenue. We also found state and regional variation in taxes and revenue, with the Northeast region having the highest taxes per pack and tax revenues. In 2019, most states had low or moderate taxes per pack and tax revenues per capita, while a few states had high taxes per pack and tax revenues per capita. ConclusionsOur research demonstrates the positive impact of increased cigarette taxes on state tax revenue over three decades. Not only do higher taxes aid in tobacco control, but they also enhance state revenues that can be reinvested in state initiatives. Some states could potentially optimize their tax rates.

Beer taxes associate with lower alcohol and cigarette use; cigarette taxes associate with lower cigarette but higher alcohol use

ABSTRACT Background: There is a yet unmet opportunity to utilize data on taxes and individual behaviors to yield insight for analyzing studies involving alcohol and cigarette use. Objectives: To inform the direction and strength of their mutual associations by leveraging the fact that taxation can affect individual consumption, but individual consumption cannot affect taxation. Methods: We linked state-level data on cigarette and beer taxes in 2009–2020 with individual-level data on self-reported current cigarette and alcohol use from the Behavioral Risk Factor Surveillance System, a telephone survey by the Centers for Disease Control and Prevention that is representative of the population of each state in the United States. We constructed linear and logistic models to examine associations between a $1 increase in cigarette taxes per pack and a $1 increase in beer taxes per gallon and self-reported cigarette use and alcohol consumption (assessed as any current intake, average drinks/day, heavy drinking, and binge drinking), adjusting for survey year and individual characteristics. Results: Among 2,968,839,352 respondents (49% male), a $1 increase in beer taxes was associated with .003 (95% confidence interval [CI] −.013, .008) fewer drinks/day and lower odds of any drinking (odds ratio [OR] = .81 95%CI .80, .83), heavy drinking (OR = .96 95%CI .93, .99), binge drinking (OR = .82 95%CI .80, .83), and smoking (OR = .98 95%CI .96, 1.00). In contrast, a $1 increase in cigarette taxes was associated with lower odds of smoking (OR = .94 95%CI .94, .95) but .007 (95%CI .005, .010) more drinks/day, and higher odds of any drinking (OR = 1.10 95%CI 1.10, 1.11), heavy drinking (OR = 1.02 95%CI 1.01, 1.02), and binge drinking (OR = .82 95%CI .80, .83). Conclusion: Higher beer taxes were associated with lower odds of drinking and smoking, but higher cigarette taxes were associated with lower odds of smoking and higher alcohol consumption. These results suggest that alcohol intake may be a determinant of cigarette use rather than cigarette use as a determinant of alcohol intake.

The association between excise taxes and smoking and vaping transitions–Findings from the 2016–2020 ITC United States surveys

BackgroundWhile a growing number of studies examined the effect of e-cigarette (EC) excise taxes on tobacco use behaviors using cross-sectional surveys or sales data, there are currently no studies that evaluate the impact of EC taxes on smoking and vaping transitions. MethodsUsing data from the US arm of the 2016–2020 International Tobacco Control Four Country Smoking and Vaping Survey (ITC 4CV), we employed a multinomial logit model with two-way fixed effects to simultaneously estimate the impacts of cigarette/EC taxes on the change in smoking and vaping frequencies. ResultsOur benchmark model suggests that a 10 % increase in cigarette taxes led to an 11 % reduction in smoking frequencies (p < 0.01), while EC taxes did not have a significant effect on smoking frequencies. ConclusionOur findings suggest that increasing cigarette taxes may serve as an effective means of encouraging people who smoke to cut back on smoking or quit smoking. The impact of increasing EC taxes on smoking transitions is less certain at this time.

How do users compare the costs between nicotine vaping products and cigarettes? Findings from the 2016-2020 International Tobacco Control United States surveys.

Nicotine vaping products (NVPs) can potentially help adult tobacco users quit smoking. This study evaluated how adult consumers compare the costs between NVPs and cigarettes. We used data from the US arm of the 2016-2020 International Tobacco Control Four Country Smoking and Vaping (ITC 4CV) surveys to perform a multinomial logit model with two-way fixed effects to measure how perceived cost comparisons are associated with NVP and cigarette taxes, use patterns, NVP device types and individual sociodemographic factors. Higher cigarette taxes are associated with a greater likelihood of perceiving NVPs and cigarettes as costing the same for the overall population and among people who exclusively smoke, and a lower likelihood of perceiving NVPs as more expensive among people who exclusively vape, compared with lower cigarette taxes. Pre-filled cartridge and tank users are more likely to perceive NVPs as less expensive than cigarettes, compared with people who use other types of NVPs. The associations between taxes and perceived cost comparison were more pronounced among males, younger and low-income populations. Higher cigarette taxes are associated with perceived financial incentives for nicotine vaping products (NVPs) over cigarettes, whereas NVP taxes are not associated with perceived cost comparison between NVPs and cigarettes.

Evaluation of Cigarette Tax Revenue in Northern Province (Case Study at the Regional Revenue Agency of North Sulawesi Province)

Tax revenue is important for a region, moreover tax revenue is used to support development in the region. Cigarette tax is a levy on cigarette excise collected by the central government. The aim of this research is to evaluate cigarette tax revenue at the Regional Revenue Agency of North Sulawesi Province. The research method used is descriptive qualitative. Data collection methods are interviews and documentation. The results of the research show that the implementation of cigarette tax revenues by BAPENDA of North Sulawesi Province is in accordance with North Sulawesi Governor Regulation number 4 of 2017 concerning Guidelines for Implementing Provincial Tax Profit Sharing and Law Number 1 of 2022 concerning Financial Relations between the Central Government and Regional Governments.

Exposure to anti- and pro-smoking messages among adults in China: Results from the Global Adult Tobacco Survey, 2018.

For decades, tobacco advertisements and promotions have been common in mass media and public places in China. In 2015, China amended the Advertising Law to prohibit the distribution of tobacco advertising, while also initiating waves of tobacco control media campaigns. This study investigates the associations between exposure to anti- and pro-smoking messages, smoking status, and people's smoking-related beliefs and willingness to support tobacco control policies. A secondary data analysis was performed with the 2018 Global Adult Tobacco Survey of 19,376 adults aged ≥15 years in China. Anti- and pro-smoking message exposures were measured as the sum of sources (media or places) where respondents have seen the messages. Multivariable logistic regression analyses were conducted to examine the relationships among smoking status, message exposure, and the outcome variables (health harm beliefs, support for increasing tax on cigarettes, support for using part of the increased tax on tobacco control) controlling for smoking status and demographic differences. Overall, 63.3% of the respondents reported being exposed to anti-smoking messages from at least 1 source, while 18.1% were exposed to pro-smoking messages from at least 1 source. Adults who currently, formerly, and never smoked differed in their beliefs about smoking and willingness to support tobacco control policies. Greater reported exposure to anti-smoking messages was positively associated with belief that smoking is harmful, support for increased cigarette tax, and support for using increased tax revenue for tobacco control measures. Meanwhile, greater reported exposure to pro-smoking messages was negatively related to willingness to support cigarette tax increases. While national and local tobacco control campaigns in China have reached a large proportion of the adult population, there is still room for improvement. China might consider expanding anti-tobacco campaigns, as reported exposure to these messages is associated with increased public awareness of the health hazards of smoking and support for increasing cigarette taxes.

Association of cigarette excise taxes and clean indoor air laws with change in smoking behavior in the United States: a Markov modeling analysis.

The rates of cigarette smoking in the United States have declined over the past few decades in parallel with increases in cigarette taxes and introduction of more stringent clean indoor air laws. Few longitudinal studies have examined association of taxes and clean indoor air policies with change in smoking nationally. This study examined the association of state and local cigarette taxes and clean indoor laws with change in smoking status of 18,499 adult participants of the longitudinal 2010-2011 Tobacco Use Supplement of the Current Population Survey over a period of 1 year. Every $1 increase in cigarette excise taxes was associated with 36% higher likelihood of stopping smoking among regular smokers. We found no association between clean indoor air laws and smoking cessation nor between taxes and clean indoor air laws with lower risk of smoking initiation. Cigarette taxes appear to be effective anti-smoking policies. Some state and local governments do not take full advantage of this effective policy measure.

Optimal Taxation of Cigarettes and E-Cigarettes: Principles for Taxing Reduced-Harm Tobacco Products.

As the tax base for traditional tobacco excise taxes continues to erode, policymakers have growing interest to expand taxation to novel and reduced-risk tobacco products. Chief among the latter are electronic nicotine delivery systems (ENDS; commonly known as e-cigarettes), although other reduced-risk tobacco products such as heated tobacco and smokeless tobacco products are also being considered for taxation. There are many possible rationales for taxing such products: to raise revenue, to correct for health externalities, to improve public health, to correct for internalities caused by irrationality or misinformation, and to redistribute income. Although each rationale leads to a different objective function, the conclusions regarding relative tax rates are largely the same. The relatively higher price elasticity of demand for e-cigarettes (compared to cigarettes) and the lower marginal harms from use imply in each case that taxes on e-cigarettes and other harm-reduced products should be relatively lower, and likely much lower, than those on cigarettes. Additional considerations concerning the policy goal of discouraging use of any tobacco product by youth are discussed as well.

The impact of tax and price reforms on companies’ prices in a complex cigarette tax system

ABSTRACT This study analyzes how changes in various aspects of excise tax systems, including minimum price laws and differential price tiers for excise taxation jointly rather than independently, influence firms’ pricing decisions. We apply our model to Indonesia, where the tobacco excise tax system is complex, with several excise tax tiers within and across cigarette types. We use a comprehensive database of prices over the past decade for all cigarettes manufactured and sold in Indonesia, obtained from Indonesian Customs. We find that the impact of excise taxes on prices hides important effects of other pricing policies that are typically ignored in research, which either focus on the independent impacts of excise tax or do not distinguish between cigarette types. Specifically, minimum price policies have a larger impact than excise taxes on pricing decisions for machine-made clove cigarettes (kretek), while excise tax changes have a larger effect on prices for machine-made, non-clove (white) cigarettes. For cigarette types and brands that are more likely to feature a relatively more elastic demand (hand-rolled kretek), companies keep prices close to the minimum price. The results imply that a multi-tiered tobacco excise tax system likely generates distortions that limit government policies’ effectiveness in reducing tobacco consumption.

How Complete Are Tobacco Sales Data? Assessing the Comprehensiveness of US Tobacco Product Retail Sales Data Through Comparisons to Excise Tax Collections.

Sales data analyses are increasingly used to guide tobacco regulatory science. However, such data do not cover specialist retailers like vape shops or tobacconists. Understanding the extent of the cigarette and electronic nicotine delivery system (ENDS) markets covered by sales data is critical to establishing such analyses' generalizability and potential biases. Using retail sales data from Information Resources Incorporated (IRI) and Nielsen, we conduct tax gap analyses comparing states' cigarette and ENDS tax revenue to tax collection estimates based on retail sales data. For the 23 US states in both retail sales datasets, cigarette tax gap analyses were conducted for each year from 2018 to 2020. Four (Louisiana, North Carolina, Ohio, and Washington) of those 23 states levied per-unit ENDS taxes and provided monthly tax revenue data covering January 2018 to October 2021, where we conducted monthly tax gap analyses for both cigarettes and ENDS. Across states covered by both sales datasets, annual mean cigarette sales in IRI and Nielsen account for 92.3% (95% CI = 88.3% to 96.2%) and 84.0% (95% CI = 79.3% to 88.7%) of state cigarette tax revenue, respectively. Monthly average coverage rates for ENDS sales were lower, ranging from 42.3% to 86.1% for IRI and 43.6% to 88.5% for Nielsen, but remained stable over time. IRI and Nielsen sales data capture almost the entire US cigarette market and a substantial but lower portion of the US ENDS market. With proper care to address shortcomings, sales data analyses can capture changes in the US market for these tobacco products. Policy evaluations and analyses using e-cigarette and cigarette sales data are often criticized because these data do not cover online sales or sales by specialty retailers like tobacconists. Cigarette sales data consistently cover nearly 90% of taxed sales, while e-cigarette sales data cover around 50% of taxed volumes. Retail sales data capture nearly all cigarette sales and a substantial portion of ENDS sales with relatively stable rates of coverage over time, supporting their continued use in tobacco surveillance and policy evaluation work.