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

Abstract

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.

Management of arterial hypertension: Challenges and opportunities

“…Education for tobacco addiction and negative effects should start in early ages with school programs. Tobacco taxation and prices, banning tobacco advertising, prohibition of smoking in public spaces and promoting awareness of the risks of tobacco use by including health warnings on packaging and antismoking advertising, are important measures to reduce the burden of tobacco use 20 …”

The role of taxation measures in the management of harmful products, services, and practices in Iran: a qualitative study

“…On the other hand, demand for most foods is not elastic, and industries and retailers can shift a large part of the price increases to consumers without significantly reducing consumption [75]. Demand for cigarettes is also inelastic [76]. Because of the inelasticity of demand, experts believe that price increases should be significant to generate meaningful behavioral changes [76,77].…”

“…Demand for cigarettes is also inelastic [76]. Because of the inelasticity of demand, experts believe that price increases should be significant to generate meaningful behavioral changes [76,77]. For example, the WHO has recommended the tax rate on SSBs should be at least 20% [78].…”

“…In addition to taxes, the use of complementary measures (such as banning advertising and banning the use of products such as tobacco in public) can help to better deal with these goods [76]. Allocating subsidies for healthy food, improving public health awareness, accessibility to healthy foods, creating a health-promoting environment, and proper nutrition in schools and workplaces are some of the most important recommendations to better deal with harmful goods [84].…”

Cigarette Prices and Smoking Experimentation in Sierra Leone: An Exploratory Study

“…We focus on tax and price policies because these tools have been found to be the most cost-effective tools to reduce smoking intensity 22 and prevent participation, [23][24][25][26][27] and serves as a winwin policy by reducing consumption and providing revenue to governments to finance other health sector activities. 28 Taxation of harmful products also improves overall population health.…”