IDEAS home Printed from https://ideas.repec.org/a/spr/hecrev/v11y2021i1d10.1186_s13561-021-00328-w.html
   My bibliography  Save this article

Distributional health and financial consequences of increased cigarette tax in Iran: extended cost-effectiveness analysis

Author

Listed:
  • Behzad Raei

    (Tehran University of Medical Sciences)

  • Sara Emamgholipour

    (Tehran University of Medical Sciences)

  • Amirhossein Takian

    (Tehran University of Medical Sciences
    Tehran University of Medical Sciences)

  • Mehdi Yaseri

    (Tehran University of Medical Sciences)

  • Ghahreman Abdoli

    (University of Tehran)

  • Ahad Alizadeh

    (Qazvin University of Medical Sciences)

Abstract

Background To assess the potential impact of a tax-induced cigarette price increase on financial and health outcomes by different socioeconomic groups. Methods In a modeled condition using pooled cross-section data from Household Income and Expenditure Survey (2002–2017) and Iran 2019 population data, a methodology of an extended cost effectiveness analysis (ECEA) was applied to model the impact on cigarette consumption of hypothetically increased cigarette tax. The methodology was employed to evaluate: [1] health benefits (premature deaths averted); [2] health expenditures regarding smoking-related disease treatment averted; [3] additional tax revenues raised; [4] change in household expenditures on cigarettes; and [5] financial risk protection among male Iranian smokers in a time span of 60 years following a one-time increase in cigarette price of 75%. The Stata version 15.1 (StataCorp., College Station, TX, USA) was used to perform the relevant analysis and estimate regression models. Results A 75% increase in cigarettes price through taxation would reduce the number of smokers by more than half a million, 11% of them in the poorest quintile; save about 1.9 million years of life (11% of which would be gained in the lowest quintile compared to 20% in the highest one); eliminate a total of US$196.4 million of health expenditures (9% of which would benefit the bottom quintile). Such a policy could raise the additional annual tax revenues by roughly US$ 1 billion, where the top two quintiles bear around 46% of the total tax burden. We estimated that the tax increase would avert an estimated 56,287 cases of catastrophic expenditure that wholly concentrated among the bottom two expenditure quintiles. Conclusion Increasing cigarette tax can provide health and financial benefits, and would be pro-poor in terms of health gains, Out-of-Pocket (OOP) savings, and financial risk protection against smoking-related diseases.

Suggested Citation

  • Behzad Raei & Sara Emamgholipour & Amirhossein Takian & Mehdi Yaseri & Ghahreman Abdoli & Ahad Alizadeh, 2021. "Distributional health and financial consequences of increased cigarette tax in Iran: extended cost-effectiveness analysis," Health Economics Review, Springer, vol. 11(1), pages 1-10, December.
    • Handle: RePEc:spr:hecrev:v:11:y:2021:i:1:d:10.1186_s13561-021-00328-w
    DOI: 10.1186/s13561-021-00328-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s13561-021-00328-w
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1186/s13561-021-00328-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. World Health Organization, 2019. "WHO report on the global tobacco epidemic 2019: Offer help to quit tobacco use," University of California at San Francisco, Center for Tobacco Control Research and Education qt1g16k8b9, Center for Tobacco Control Research and Education, UC San Francisco.
    2. World Health Organization, 2015. "WHO report on the global tobacco epidemic, 2015: Raising taxes on tobacco," University of California at San Francisco, Center for Tobacco Control Research and Education qt1fh1f32m, Center for Tobacco Control Research and Education, UC San Francisco.
    3. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luis Huesca & Abdelkrim Araar & Linda Llamas & Guy Lacroix, 2021. "The impact of tobacco tax reforms on poverty in Mexico," SN Business & Economics, Springer, vol. 1(10), pages 1-18, October.
    2. Nomsa Y. Nkomo & Beatrice D. Simo-Kengne & Mduduzi Biyase, 2021. "The impact of mental health behaviour on tobacco consumption in South Africa," Economic Development and Well-being Research Group Working Paper Series edwrg-02-2021, University of Johannesburg, College of Business and Economics, revised 2021.
    3. Mengyuan Zhou, 2022. "Does the Source of Inheritance Matter in Bequest Attitudes? Evidence from Japan," Journal of Family and Economic Issues, Springer, vol. 43(4), pages 867-887, December.
    4. Campbell, Randall C. & Nagel, Gregory L., 2016. "Private information and limitations of Heckman's estimator in banking and corporate finance research," Journal of Empirical Finance, Elsevier, vol. 37(C), pages 186-195.
    5. Giuliani, Elisa & Martinelli, Arianna & Rabellotti, Roberta, 2016. "Is Co-Invention Expediting Technological Catch Up? A Study of Collaboration between Emerging Country Firms and EU Inventors," World Development, Elsevier, vol. 77(C), pages 192-205.
    6. Ilona Babenko & Benjamin Bennett & John M Bizjak & Jeffrey L Coles & Jason J Sandvik, 2023. "Clawback Provisions and Firm Risk," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 12(2), pages 191-239.
    7. Şahan, Duygu & Tuna, Okan, 2018. "Environmental innovation of transportation sector in OECD countries," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Kersten, Wolfgang & Blecker, Thorsten & Ringle, Christian M. (ed.), The Road to a Digitalized Supply Chain Management: Smart and Digital Solutions for Supply Chain Management. Proceedings of the Hamburg International C, volume 25, pages 157-170, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.
    8. Ruomeng Cui & Dennis J. Zhang & Achal Bassamboo, 2019. "Learning from Inventory Availability Information: Evidence from Field Experiments on Amazon," Management Science, INFORMS, vol. 65(3), pages 1216-1235, March.
    9. Luiz Paulo Fávero & Joseph F. Hair & Rafael de Freitas Souza & Matheus Albergaria & Talles V. Brugni, 2021. "Zero-Inflated Generalized Linear Mixed Models: A Better Way to Understand Data Relationships," Mathematics, MDPI, vol. 9(10), pages 1-28, May.
    10. Shaikh M. S. U. Eskander & Sam Fankhauser, 2022. "Income Diversification and Income Inequality: Household Responses to the 2013 Floods in Pakistan," Sustainability, MDPI, vol. 14(1), pages 1-12, January.
    11. Iván Fernández-Val & Martin Weidner, 2018. "Fixed Effects Estimation of Large-TPanel Data Models," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 109-138, August.
    12. Peter Harasztosi & Attila Lindner, 2019. "Who Pays for the Minimum Wage?," American Economic Review, American Economic Association, vol. 109(8), pages 2693-2727, August.
    13. Cho, Seong-Hoon & Kim, Heeho & Roberts, Roland K. & Kim, Taeyoung & Lee, Daegoon, 2014. "Effects of changes in forestland ownership on deforestation and urbanization and the resulting effects on greenhouse gas emissions," Journal of Forest Economics, Elsevier, vol. 20(1), pages 93-109.
    14. Kazuki Onji & John P. Tang, 2015. "A nation without a corporate income tax: Evidence from nineteenth century Japan," Discussion Papers in Economics and Business 15-12, Osaka University, Graduate School of Economics.
    15. Brown, Sarah & Greene, William H. & Harris, Mark N. & Taylor, Karl, 2015. "An inverse hyperbolic sine heteroskedastic latent class panel tobit model: An application to modelling charitable donations," Economic Modelling, Elsevier, vol. 50(C), pages 228-236.
    16. Roberto Martino & Phu Nguyen-Van, 2014. "Labour market regulation and fiscal parameters: A structural model for European regions," Working Papers of BETA 2014-19, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    17. Etienne Redor & Magnus Blomkvist, 2021. "Do all inside and affiliated directors hold the same value for shareholders?," Economics Bulletin, AccessEcon, vol. 41(3), pages 882-895.
    18. Upasak Das & Rupayan Pal & Udayan Rathore & Bibhas Saha, 2023. "Rein in pandemic by pricing vaccine: Does social trust matter?," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2023-008, Indira Gandhi Institute of Development Research, Mumbai, India.
    19. Andreas Fagereng & Luigi Guiso & Davide Malacrino & Luigi Pistaferri, 2020. "Heterogeneity and Persistence in Returns to Wealth," Econometrica, Econometric Society, vol. 88(1), pages 115-170, January.
    20. Boeker, Warren & Howard, Michael D. & Basu, Sandip & Sahaym, Arvin, 2021. "Interpersonal relationships, digital technologies, and innovation in entrepreneurial ventures," Journal of Business Research, Elsevier, vol. 125(C), pages 495-507.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:hecrev:v:11:y:2021:i:1:d:10.1186_s13561-021-00328-w. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com/economics/journal/13561 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.