The health, financial and distributional consequences of increases in the tobacco excise tax among smokers in Lebanon

Abstract

Tobacco use is a significant risk factor for the leading causes of death worldwide, including cancer, heart disease and stroke. Most of these deaths occur in low- and middle-income countries, where tobacco-related deaths are also rising rapidly. Taxation is one of the most effective tobacco control measures, yet evidence on the distributional impact of tobacco taxation in low- and middle-income countries remains scant. This paper considers the financial and health effects, by socio-economic class, of increasing tobacco taxes in Lebanon, a middle-income country.An Almost Ideal Demand System is used to estimate price elasticities of demand for tobacco products. Extended cost-effectiveness analysis (ECEA) methods are applied to quantify, across quintiles of socio-economic status, the health benefits gained, the additional tax revenues raised, and the net financial consequences for households from a 50% increase in the price of tobacco through excise taxes. We find that demand for tobacco is price inelastic with elasticities ranging from −0.32 for the poorest quintile to −0.22 for the richest quintile. The increase in tobacco tax is estimated to result in 65,000 (95% CI: 37,000–93,000) premature deaths averted, 25% of them in the poorest quintile, $300M ($256–340M) of additional tax revenues, 12% borne by the poorest quintile, $23M ($13–33M) of out-of-pocket spending on healthcare averted, 36% of which accrue to the poorest quintile, 9% to the richest. These savings would be associated with 23,000 (13,000–33,000) poverty cases averted (63% in the poorest quintile). Increasing tobacco taxes would lead to large financial and health benefits, and would be pro-poor in health gains, savings on healthcare, and poverty reduction.

Distributional health and financial benefits of increased tobacco taxes in Colombia: results from a modelling study

“…However, our derived price elasticity estimates are consistent with previously published evidence,19 including studies reporting on price elasticity across income quintiles. For example, a Korean study found a price elasticity among the poor of −0.81 vs −0.32 among the rich33; a study in Moldova found a price elasticity of −0.51 among the poor vs −0.26 among the rich34; an ECEA of tobacco tax in Lebanon estimated a price elasticity of −0.32 among the poor vs −0.22 among the rich22 and Postolovska et al estimated a price elasticity of −0.74 among the poor vs −0.28 among the rich in the Kyrgyz Republic 23. We also ran two sensitivity analyses with alternative values for price elasticity (−0.40 and −0.78)19 32 to understand the impact this parameter would have on our findings.…”

“…ECEA was designed to study the impact of policy along three dimensions: health benefits, out-of-pocket (OOP) expenditure ‘crowded out’ for households and individuals with the associated financial risk protection provided (eg, cases of catastrophic health expenditure averted) and distributional consequences (eg, across socioeconomic groups, geographical settings). ECEA has been previously applied to examine the distributional impact of tobacco tax policy in China,26 27 Lebanon22 and Armenia,23 while the distributional incidence of tobacco taxes has also been previously studied in Chile 28. Here, we draw from a previously published ECEA tobacco tax model26 27 to study impact on: the years of life gained (YLG) associated with smoking cessation; the change in tobacco tax burden and the change in cigarette expenditure.…”

Attachment style and addictions (alcohol, cigarette, waterpipe and internet) among Lebanese adolescents: a national study

“…The incidence of cigarette smoking is increasing globally, with a higher incidence in developing countries [25], where Lebanon ranks first in terms of smoking prevalence in the Middle-East and among Arab women [25]. Its prevalence is also rising among adolescents (3.9% frequent smokers in 2012), especially in the presence of a family member or friend who smokes [26].…”

Association between parental separation and addictions in adolescents: results of a national Lebanese study

“…Cigarette smoking among adolescents is on the rise, varying between 10.4% 11 and 51% 12 . Most of them occur in developing countries 13 . Lebanon is smoking prevalence ranks first in the Middle East and for Arab females, with 43% of men and 28% of women in Lebanon being smokers 13 .…”

“…Most of them occur in developing countries 13 . Lebanon is smoking prevalence ranks first in the Middle East and for Arab females, with 43% of men and 28% of women in Lebanon being smokers 13 . Waterpipe smoking prevalence is high in Lebanon especially in youth, with 35% of teens aged between 13 and 15 having used it; among them, 47% smoked less than once weekly, 38% weekly but not daily, 16% daily 14 .…”