title: 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.
authors: Department of Economics, American University of Beirut, Beirut, Lebanon. Electronic address: nisreen.salti@aub.edu.lb.
authors: Nisreen
authors: N
authors: Salti
authors: Department of Global Health, University of Washington, Seattle, WA, USA.
authors: Elizabeth
authors: E
authors: Brouwer
authors: Department of Global Health and Population, Harvard T.H. Chan School of Public Health, Boston, MA, USA.
authors: Stéphane
authors: S
authors: Verguet
mesh_terms: D000293:Adolescent; D000328:Adult; D000368:Aged; D000369:Aged, 80 and over; D003257:Consumer Product Safety / Q000331:legislation & jurisprudence; D005260:Female; D005102:Health Expenditures / Q000706:statistics & numerical data*; D006801:Humans; D007861:Lebanon; D008297:Male; D008875:Middle Aged; D011634:Public Health / Q000191:economics / Q000592:standards*; D012307:Risk Factors; D000074285:Smokers / Q000706:statistics & numerical data*; D013660:Taxes / Q000191:economics*; D062789:Tobacco Products / Q000191:economics*
keywords: Distributional consequences; Equity; Extended cost-effectiveness analysis; Financial risk protection; Lebanon; Tobacco taxation