Distributional benefits of tobacco tax and smoke–free workplaces in China: A modeling study

Abstract

BackgroundTobacco taxation and smoke–free workplaces reduce smoking, tobacco–related premature deaths and associated out–of–pocket health care expenditures. We examine the distributional consequences of a price increase in tobacco products through an excise tax hike, and of an implementation of smoke–free workplaces, in China.MethodsWe use extended cost–effectiveness analysis (ECEA) to evaluate, across income quintiles of the male population (the large majority of Chinese smokers), the premature deaths averted, the change in tax revenues generated, and the financial risk protection procured (eg, poverty cases averted, defined as the number of individuals no longer facing tobacco–related out–of–pocket expenditures for disease treatment, that would otherwise impoverish them), that would follow a 75% increase in cigarette prices through substantial increments in excise tax fully passed onto consumers, and a nationwide total implementation of workplace smoking bans.ResultsA 75% increase in cigarette prices would avert about 24 million premature deaths among the current Chinese male population, with a third among the bottom income quintile, increase additional tax revenues by US$ 46 billion annually, and prevent around 9 million poverty cases, 19% of which among the bottom income quintile. Implementation of smoking bans in workplaces would avert about 12 million premature deaths, with a fifth among the bottom income quintile, decrease tax revenues by US$ 7 billion annually, and prevent around 4 million poverty cases, 12% of which among the bottom income quintile.ConclusionsIncreased excise taxes on tobacco products and workplace smoking bans can procure large health and economic benefits to the Chinese population, especially among the poor.

An Extended Cost-Effectiveness Analysis of Tobacco Price Increases in the Kyrgyz Republic

“…In this paper, a previously developed ECEA model is applied (Verguet and others 2017) to estimate the potential consequences of increasing tobacco excise taxes in the Kyrgyz This analysis is guided by the conceptual framework presented in Figure 1. Specifically it is assumed that the excise tax is directly passed on to the consumer in the form of higher prices.…”

Estimating the Distributional Impact of Increasing Taxes on Tobacco Products in Armenia

“…In addition, such studies focused their analysis primarily on health gains and often did not explore the smokers' financial consequences related to treatment of tobacco-related diseases. Here we built on a previously developed ECEA model for examining increases in tobacco taxes (31,41) to examine the premature deaths averted, the OOP expenditures averted and financial risk protection provided, and their distributions across socioeconomic groups among male smokers, by an increase in the excise taxes on tobacco products in Armenia.…”

“…To calculate the premature deaths averted (∆-%,' ), we used estimates from Doll et al (40,41) to model the changes in expected mortality based on the age at smoking cessation (. % ), assuming that half of smokers would die from their addiction.…”

“…We updated a simple static model (41) To calculate the premature deaths averted we used estimates from Doll et al (40,41) to model the changes in expected mortality based on the age at smoking cessation assuming that half of smokers would die from their addiction. (40,42,43) Hence, the number of premature deaths averted would be:…”

An Extended Cost-Effectiveness AnalysisThe Distributional Consequences of Increasing Tobacco Taxes on Colombia’s Health and Finances

“…ECEA was designed to pursue health policy assessment and to study the impact of policy (e.g., increase in tobacco taxes) along three dimensions: the health benefits (e.g., deaths averted); the out-of-pocket (OOP)/ private expenditures "crowded out" for households and individuals, and correspondingly the financial risk protection (FRP) provided (e.g., cases of catastrophic health expenditures averted); and the distributional consequences (e.g., across socioeconomic groups, geographical settings). In particular, ECEA has been previously applied to the examination of increased tobacco taxes in China [25,26], Lebanon [19], and Armenia [20].…”