Empirical analysis of the output effects of cigarette taxes in South Africa and the regional impact

Merwe, René van der; Abedian, Iraj

doi:10.1007/978-1-4471-0769-9_299

Cited by 2 publications

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“…For instance, a study on Scotland by McNicoll and Boyle (1992) assumed the elimination of domestic tobacco consumption expenditures and the redistribution of the amount to other sectors, according to average expenditure patterns. Similarly, van der Merwe (1998a, 1998b), Buck et al (1995) and Irvine and Sims (1997) assumed full elimination, a 40 per cent decline and a 20 per cent decline in domestic tobacco consumption, respectively. All studies projected net economic gains.…”

Section: Introductionmentioning

confidence: 98%

“…All studies projected net economic gains. However, a study on Zimbabwe by van der Merwe (1998c) reported net losses under the scenario of elimination of domestic consumption expenditures and all tobacco production in 1980, and redistribution according to ‘average’ input-output patterns, with all production shifted to alternatives in agriculture. In terms of the assumptions regarding the redistribution of the marginal increase in smokers’ income, other scenarios are also suggested in the literature, e.g., increase of expenditure on recreational goods and services rather than on essential items (Buck et al, 1995).…”

Section: Introductionmentioning

confidence: 99%

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Tobacco-free Economy: A SAM-based Multiplier Model to Quantify the Impact of Changes in Tobacco Demand in Bangladesh

Husain

Khondker

2016

Margin: The Journal of Applied Economic Research

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In Bangladesh, where tobacco use is pervasive, reducing tobacco use is economically beneficial. This paper uses the latest Bangladesh social accounting matrix (SAM) multiplier model to quantify the economy-wide impact of demand-driven changes in tobacco cultivation, bidi industries, and cigarette industries. First, we compute various income multiplier values (i.e. backward linkages) for all production activities in the economy to quantify the impact of changes in demand for the corresponding products on gross output for 86 activities, demand for 86 commodities, returns to four factors of production, and income for eight household groups. Next, we rank tobacco production activities by income multiplier values relative to other sectors. Finally, we present three hypothetical ‘tobacco-free economy’ scenarios by diverting demand from tobacco products into other sectors of the economy and quantifying the economy-wide impact. The simulation exercises with three different tobacco-free scenarios show that, compared to the baseline values, total sectoral output increases by 0.92%, 1.3%, and 0.75%. The corresponding increases in the total factor returns (i.e. GDP) are 1.57%, 1.75%, and 1.75%. Similarly, total household income increases by 1.40%, 1.58%, and 1.55%.

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Section: Introductionmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 99%

Tobacco-free Economy: A SAM-based Multiplier Model to Quantify the Impact of Changes in Tobacco Demand in Bangladesh

Husain

Khondker

2016

Margin: The Journal of Applied Economic Research

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“…There are concerns that recent gains in tobacco control in South Africa may be reduced or even counteracted due to the illicit trade of cigarettes from neighbouring countries. 9 News reports describing cigarette ‘runners’ crossing the Zimbabwe border—the sixth largest tobacco exporter globally 10 —suggest that they carry an average of ZAR 12 900 (∼US$1300) worth of illicitly traded cigarettes per run. 11–13 These reports have been utilised by the South African tobacco industry to argue against further increases in excise taxes, 14 using advertising campaigns against the purchase of illicit cigarettes.…”

Section: Introductionmentioning

confidence: 99%

A comparative assessment of the price, brands and pack characteristics of illicitly traded cigarettes in five cities and towns in South Africa

et al. 2014

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ObjectiveThe prevalence of illicitly traded cigarettes in South Africa has been reported to be 40–50%. However, these estimates do not account for the more nuanced characteristics of the illicit cigarette trade. With the goal of better understanding contraband cigarettes in South Africa, this study piloted three methods for assessing the price, brands, pack features and smoker's views about illicit cigarettes in five cities/towns. Data were collected in June and July 2012.SettingA convenience sample of three South African cities (Johannesburg, Durban and Nelspruit) and two smaller towns (Musina and Ficksburg) were chosen for this study.Outcome measuresThree cross-sectional approaches were used to assess the characteristics of contraband cigarettes: (1) a dummy purchase of cigarettes from informal retailers, (2) the collection of discarded cigarette packs and (3) a survey of tobacco smokers.ParticipantsFor the purposes of the survey, 40 self-reported smokers were recruited at taxi ranks in each downtown site. Adults who were over the age of 18 were asked to verbally consent to participate in the study and answer a questionnaire administered by a researcher.ResultsThe leading reason for labelling a pack as illicit in each city/town was the absence of an excise stamp (28.6% overall), and the least common reason was an illegal tar or nicotine level (11.1% overall). The overall proportion of informal vendors who sold illicit cigarettes was 41%. Singles and packs of 20 were consistently cheaper at informal vendors. Survey participants’ responses reflected varied perspectives on illicit cigarettes and purchasing preferences.ConclusionsEach approach generated an interesting insight into physical aspects of illicit cigarettes. While this pilot study cannot be used to generate generalisable statistics on illicit cigarettes, more systematic surveys of this nature could inform researchers’ and practitioners’ initiatives to combat illicit and legal cigarette sales and usage.

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Empirical analysis of the output effects of cigarette taxes in South Africa and the regional impact

Cited by 2 publications

References 0 publications

Tobacco-free Economy: A SAM-based Multiplier Model to Quantify the Impact of Changes in Tobacco Demand in Bangladesh

Tobacco-free Economy: A SAM-based Multiplier Model to Quantify the Impact of Changes in Tobacco Demand in Bangladesh

A comparative assessment of the price, brands and pack characteristics of illicitly traded cigarettes in five cities and towns in South Africa

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