Effect of comprehensive smoke-free legislation on the tourism industry in countries of the Caribbean Community.

Objective: To assess whether the introduction of comprehensive smoke-free legislation affected tourism in four Caribbean Community (CARICOM) countries - Barbados, Guyana, Jamaica, and Trinidad and Tobago. Methods: We compared the evolution of three tourism variables - tourist arrivals, tourist expenditure, and average length of stay - in a country implementing smoke-free environments (treated country) with the evolution of these variables in the same country if smoke-free legislation had not been implemented. We used a synthetic control method to recreate this counterfactual scenario by constructing a synthetic country using a weighted average of several donor-pool CARICOM countries that did not introduce legislation on smoke-free environments during the period analyzed. We quantified the effect of the smoke-free environments on tourism as the difference between tourism variables in the treated and synthetic country. To assess whether the estimated effect of the smoke-free environments was the result of chance, we compared the effects of legislation in the treated country to placebo effects in the donor pool by assuming comprehensive smoke-free legislation was introduced in the same year as in the treated country. Results: Implementing smoke-free environments did not affect the arrival of tourists, tourism expenditure, or the average length of stay in the four countries. Conclusions: Our findings provide strong evidence that public policies banning smoking in public places do not affect hospitality and tourism businesses. Given the economic significance of this industry in the Caribbean, the local evidence provided by this study will help to effectively counteract interference by the tobacco industry and advance towards a smoke-free Caribbean.

Effect of comprehensive smoke-free legislation on the tourism industry in countries of the Caribbean Community

[ABSTRACT]. Objective. To assess whether the introduction of comprehensive smoke-free legislation affected tourism in four Caribbean Community (CARICOM) countries – Barbados, Guyana, Jamaica, and Trinidad and Tobago. Methods. We compared the evolution of three tourism variables – tourist arrivals, tourist expenditure, and aver- age length of stay – in a country implementing smoke-free environments (treated country) with the evolution of these variables in the same country if smoke-free legislation had not been implemented. We used a synthetic control method to recreate this counterfactual scenario by constructing a synthetic country using a weighted average of several donor-pool CARICOM countries that did not introduce legislation on smoke-free environ- ments during the period analyzed. We quantified the effect of the smoke-free environments on tourism as the difference between tourism variables in the treated and synthetic country. To assess whether the estimated effect of the smoke-free environments was the result of chance, we compared the effects of legislation in the treated country to placebo effects in the donor pool by assuming comprehensive smoke-free legislation was introduced in the same year as in the treated country. Results. Implementing smoke-free environments did not affect the arrival of tourists, tourism expenditure, or the average length of stay in the four countries. Conclusions. Our findings provide strong evidence that public policies banning smoking in public places do not affect hospitality and tourism businesses. Given the economic significance of this industry in the Carib- bean, the local evidence provided by this study will help to effectively counteract interference by the tobacco industry and advance towards a smoke-free Caribbean.

[RESUMEN]. Objetivo. Evaluar si la introducción de una legislación integral sobre ambientes libres de humo tuvo algún efecto sobre el turismo en cuatro países de la Comunidad del Caribe (CARICOM): Barbados, Guyana, Jamaica y Trinidad y Tobago. Métodos. Comparamos la evolución de tres variables turísticas (llegada de turistas, gasto de los turistas y duración promedio de la estancia) en un país que ha establecido entornos libres de humo de tabaco (país tratado) con la evolución de estas variables en el mismo país si no se hubiera adoptado una legislación sobre ambientes libres de humo. Se empleó un método de control sintético para recrear este escenario contrafáctico mediante la construcción de un país sintético utilizando un promedio ponderado de varios países del grupo de donantes de CARICOM que no habían introducido una legislación relativa a entornos libres de humo durante el período analizado. Se cuantificó el efecto de los entornos libres de humo de tabaco sobre el tur- ismo como la diferencia entre las variables turísticas en el país tratado y el sintético. Para evaluar si el efecto estimado de los entornos libres de humo fue estadísticamente significativo, se compararon los efectos de la legislación en el país tratado con los efectos placebo en el grupo de donantes mediante la suposición de que se hubiese introducido una legislación integral sobre ambientes libre de humo en el mismo año que en el país tratado. Resultados. La implementación de entornos sin humo de tabaco no tuvo ningún efecto en la llegada de tur- istas, el gasto de los turistas o la duración promedio de la estancia en los cuatro países. Conclusiones. Nuestros hallazgos ofrecen una prueba sólida de que las políticas públicas que prohíben fumar en lugares públicos no afectan a las empresas de hospitalidad y turismo. Dada la importancia económica de esta industria en el Caribe, la evidencia local proporcionada por este estudio ayudará a contrarrestar eficaz- mente la interferencia de la industria tabacalera y avanzar hacia una Comunidad del Caribe libre de humo de tabaco.

[RESUMO]. Objetivo. Avaliar se a promulgação de uma lei antifumo abrangente afetou o turismo em quatro países da Comunidade do Caribe (CARICOM), a saber: Barbados, Guiana, Jamaica e Trinidad e Tobago. Métodos. Comparamos a evolução de três variáveis relacionadas ao turismo (desembarque de turistas, des- pesas de turistas e duração média da estadia) em um país que havia implementado ambientes livres de fumo (país tratado) com a evolução dessas variáveis no mesmo país se a lei antifumo não tivesse sido implemen- tada. Usamos um método de controle sintético para recriar esse contrafactual, construindo um país sintético usando uma média ponderada de vários países doadores da CARICOM que não promulgaram leis sobre ambientes livres de fumaça durante o período analisado. Quantificamos o efeito dos ambientes livres de fumo no turismo como a diferença entre as variáveis de turismo no país tratado e no país sintético. Para avaliar se o efeito estimado dos ambientes livres de fumo foi resultado do acaso, comparamos os efeitos da legislação do país tratado com os efeitos placebo no grupo de doadores, supondo que uma lei antifumo abrangente havia sido promulgada no mesmo ano que no país tratado. Resultados. A implementação de ambientes livres de fumo não afetou o desembarque de turistas, as despe- sas de turistas ou a duração média da estadia nos quatro países. Conclusões. Nossas constatações fornecem evidências robustas de que as políticas públicas que proíbem o fumo em locais públicos não afetam o setor de hospitalidade e turismo. Considerando a importância econômica desta indústria para o Caribe, as evidências locais fornecidas por este estudo ajudarão a com- bater efetivamente a interferência da indústria do tabaco e a avançar rumo a um Caribe livre do fumo.

Effect of comprehensive smoke-free legislation on the tourism industry in countries of the Caribbean Community / Efecto de una legislación integral sobre ambientes libres de humo en la industria del turismo en los países de la Comunidad del Caribe / Efeito de uma lei antifumo abrangente sobre a indústria do turismo em países da Comunidade do Caribe

ABSTRACT Objective. To assess whether the introduction of comprehensive smoke-free legislation affected tourism in four Caribbean Community (CARICOM) countries - Barbados, Guyana, Jamaica, and Trinidad and Tobago. Methods. We compared the evolution of three tourism variables - tourist arrivals, tourist expenditure, and average length of stay - in a country implementing smoke-free environments (treated country) with the evolution of these variables in the same country if smoke-free legislation had not been implemented. We used a synthetic control method to recreate this counterfactual scenario by constructing a synthetic country using a weighted average of several donor-pool CARICOM countries that did not introduce legislation on smoke-free environments during the period analyzed. We quantified the effect of the smoke-free environments on tourism as the difference between tourism variables in the treated and synthetic country. To assess whether the estimated effect of the smoke-free environments was the result of chance, we compared the effects of legislation in the treated country to placebo effects in the donor pool by assuming comprehensive smoke-free legislation was introduced in the same year as in the treated country. Results. Implementing smoke-free environments did not affect the arrival of tourists, tourism expenditure, or the average length of stay in the four countries. Conclusions. Our findings provide strong evidence that public policies banning smoking in public places do not affect hospitality and tourism businesses. Given the economic significance of this industry in the Caribbean, the local evidence provided by this study will help to effectively counteract interference by the tobacco industry and advance towards a smoke-free Caribbean.

RESUMEN Objetivo. Evaluar si la introducción de una legislación integral sobre ambientes libres de humo tuvo algún efecto sobre el turismo en cuatro países de la Comunidad del Caribe (CARICOM): Barbados, Guyana, Jamaica y Trinidad y Tobago. Métodos. Comparamos la evolución de tres variables turísticas (llegada de turistas, gasto de los turistas y duración promedio de la estancia) en un país que ha establecido entornos libres de humo de tabaco (país tratado) con la evolución de estas variables en el mismo país si no se hubiera adoptado una legislación sobre ambientes libres de humo. Se empleó un método de control sintético para recrear este escenario contrafáctico mediante la construcción de un país sintético utilizando un promedio ponderado de varios países del grupo de donantes de CARICOM que no habían introducido una legislación relativa a entornos libres de humo durante el período analizado. Se cuantificó el efecto de los entornos libres de humo de tabaco sobre el turismo como la diferencia entre las variables turísticas en el país tratado y el sintético. Para evaluar si el efecto estimado de los entornos libres de humo fue estadísticamente significativo, se compararon los efectos de la legislación en el país tratado con los efectos placebo en el grupo de donantes mediante la suposición de que se hubiese introducido una legislación integral sobre ambientes libre de humo en el mismo año que en el país tratado. Resultados. La implementación de entornos sin humo de tabaco no tuvo ningún efecto en la llegada de turistas, el gasto de los turistas o la duración promedio de la estancia en los cuatro países. Conclusiones. Nuestros hallazgos ofrecen una prueba sólida de que las políticas públicas que prohíben fumar en lugares públicos no afectan a las empresas de hospitalidad y turismo. Dada la importancia económica de esta industria en el Caribe, la evidencia local proporcionada por este estudio ayudará a contrarrestar eficazmente la interferencia de la industria tabacalera y avanzar hacia una Comunidad del Caribe libre de humo de tabaco.

RESUMO Objetivo. Avaliar se a promulgação de uma lei antifumo abrangente afetou o turismo em quatro países da Comunidade do Caribe (CARICOM), a saber: Barbados, Guiana, Jamaica e Trinidad e Tobago. Métodos. Comparamos a evolução de três variáveis relacionadas ao turismo (desembarque de turistas, despesas de turistas e duração média da estadia) em um país que havia implementado ambientes livres de fumo (país tratado) com a evolução dessas variáveis no mesmo país se a lei antifumo não tivesse sido implementada. Usamos um método de controle sintético para recriar esse contrafactual, construindo um país sintético usando uma média ponderada de vários países doadores da CARICOM que não promulgaram leis sobre ambientes livres de fumaça durante o período analisado. Quantificamos o efeito dos ambientes livres de fumo no turismo como a diferença entre as variáveis de turismo no país tratado e no país sintético. Para avaliar se o efeito estimado dos ambientes livres de fumo foi resultado do acaso, comparamos os efeitos da legislação do país tratado com os efeitos placebo no grupo de doadores, supondo que uma lei antifumo abrangente havia sido promulgada no mesmo ano que no país tratado. Resultados. A implementação de ambientes livres de fumo não afetou o desembarque de turistas, as despesas de turistas ou a duração média da estadia nos quatro países. Conclusões. Nossas constatações fornecem evidências robustas de que as políticas públicas que proíbem o fumo em locais públicos não afetam o setor de hospitalidade e turismo. Considerando a importância econômica desta indústria para o Caribe, as evidências locais fornecidas por este estudo ajudarão a combater efetivamente a interferência da indústria do tabaco e a avançar rumo a um Caribe livre do fumo.

Impact of a recent tobacco tax reform in Argentina.

The literature on policies for the control of the tobacco epidemic suggests that increasing excise taxes on the consumption of tobacco products is the most cost-effective policy. Cigarette tax structure in Argentina is very complex. All the tax bases for cigarette consumption taxes are related and, therefore, any modification of a tax affects the collection of the rest of the taxes. This is important given that funds raised by one of the taxes, the Special Tobacco Fund (FET), are allocated among the tobacco provinces according to the value of tobacco production. These provinces oppose in the congress to any reform that increase taxes on cigarette consumption that negatively affects these funds. In May 2016, the government decided to increase the rate of one of the taxes, the internal tax, from 60% to 75%. We study the impact on cigarettes' demand price elasticity, consumption and tax revenues of this tobacco tax reform. Using an Error Correction Model, we estimate short-run and long-run demand price and income elasticities. We find that the tax reform of May 2016 induced an increase in the magnitude, in absolute value, of the short-run demand price elasticity and at the same time increased the funds collected by the FET. We simulate the effects of the tax reform over the government revenues and per-capita consumption of cigarettes showing that additional increments in taxes would increase revenues and diminish consumption of cigarettes.

How Raising Tobacco Prices Affects the Decision to Start and Quit Smoking: Evidence from Argentina.

We used a two-part model for the estimation of the price elasticity of participation and consumption of cigarettes by the duration of the smoking habit and a continuous-time split-population model for the estimation of prevalence and duration of smoking onset and smoking addiction, allowing for covariates in the participation component of the model. Results: We computed the total price elasticity of consumption of cigarettes by quartiles of addiction and found that for the people located in the lowest quartile of addiction the total price elasticity is around -0.51; while for those located in the highest quartile of addiction this figure is only -0.19. Then, a 10% increase in cigarette prices, via taxes, reduces the consumption of those in the early stages of the addiction by 5% and for those with a longer history of addiction by only 1.9%. Estimating the continuous-time split-population model we found that, at the mean starting age of 15 years, an increase of 10% in real cigarette prices is expected to delay smoking onset by almost two and a half years. On the other hand, the same policy is less effective to reduce the duration of the habit because there is no meaningful relationship between the duration of the smoking habit and the real price of cigarettes.The policy of raising cigarette excise taxes, to increment prices, seems to be more effective to delay smoking onset. On the other hand, the same policy is less effective to reduce the duration of the habit. A policy recommendation that emerges from this evidence is that for people with a developed addiction a combination of increasing taxes and other public health policies, like cessation therapies, could prove more effective.

Analysis of cigarette demand in Argentina: the impact of price changes on consumption and government revenues.

OBJECTIVE:: To estimate cigarette demand and to simulate a tax policy targeted to reduce tobacco consumption. MATERIALS AND METHODS:: Demand was estimated using a vector error correction model. Simulation exercises present the impact of a tax increase on consumption and revenues. RESULTS:: Changes in real income and the real price of cigarettes affect the demand for cigarettes in Argentina. The long term price elasticity is 0.279 (a 10% increase in real prices reduces cigarette consumption by 2.79% per quarter) and the long term income elasticity is 0.411 (a 10% increase in real income raises consumption by 4.11% per quarter). Even in a conservative scenario, simulations show that increasing the price of cigarettes by 100% using excise taxes would maximize revenues and reduce cigarette consumption. CONCLUSION:: There is sufficient room to increase taxes, reducing cigarette consumption, while still increasing tax revenues.

Analysis of cigarette demand in Argentina: the impact of price changes on consumption and government revenues / Análisis de la demanda de cigarrillos en Argentina: impacto de variaciones de precios en el consumo y recaudación

Abstract: Objective: To estimate cigarette demand and to simulate a tax policy targeted to reduce tobacco consumption. Materials and methods: Demand was estimated using a vector error correction model. Simulation exercises present the impact of a tax increase on consumption and revenues. Results: Changes in real income and the real price of cigarettes affect the demand for cigarettes in Argentina. The long term price elasticity is 0.279 (a 10% increase in real prices reduces cigarette consumption by 2.79% per quarter) and the long term income elasticity is 0.411 (a 10% increase in real income raises consumption by 4.11% per quarter). Even in a conservative scenario, simulations show that increasing the price of cigarettes by 100% using excise taxes would maximize revenues and reduce cigarette consumption. Conclusion: There is sufficient room to increase taxes, reducing cigarette consumption, while still increasing tax revenues.

Resumen: Objetivo: Estimar la demanda de cigarrillos y simular una política fiscal dirigida a reducir el consumo de tabaco. Material y métodos: Se estima la demanda mediante el modelo de corrección de errores. Se simula el impacto del incremento de los impuestos en el consumo y la recaudación. Resultados: Las variaciones en ingreso y precio real de los cigarrillos afectan la demanda. La elasticidad precio de la demanda de largo plazo es de 0.279 (10% de aumento en los precios reales reduce el consumo de cigarrillos en 2.79% en un trimestre) y la elasticidad ingreso de largo plazo es 0.411 (10% de aumento en el ingreso real aumenta el consumo en 4.11% en un trimestre). Aun en un escenario conservador, un incremento del precio de los cigarrillos de 100% vía impuestos maximizaría la recaudación y reduciría el consumo de cigarrillos. Conclusión: Es posible incrementar los impuestos reduciendo el consumo de cigarrillos e incrementando la recaudación.

[Demand for cigarettes and tax increases in El Salvador]. / La demanda de cigarrillos y el aumento de impuestos en El Salvador.

OBJECTIVE: Analyze short- and long-term elasticities of demand for cigarettes in El Salvador as a tool for supporting recommendations on tax increases to reduce prevalence and consumption through price increases. METHODS: Demand for cigarettes in El Salvador was analyzed through an econometric time-series model using a database from El Salvador's General Directorate of Internal Taxes (DGII) and the General Directorate of Statistics and Census (DIGESTYC). The analysis period was quarterly: 2000Q1-2012Q4. The usual tests were done to prevent a spurious econometric estimation. It was found that the variables volume sales, actual sale prices, and actual per capita income exhibited first-order cointegration; this result makes it possible to use an error correction model with short- and long-term elasticity estimates. RESULTS: Only long-term elasticities were found to be statistically significant to 5%. Results show long-term price elasticity (5 quarters) of -0.9287 and income price elasticity of 0.9978. CONCLUSIONS: Absolute price elasticity is somewhat high, although it is within the levels estimated in other studies in low per-capita income countries. A tax increase from a base amount of US$1.04 per pack of 20 cigarettes to US$1.66 within three years would reduce demand by 20% to 31% and would increase tax revenues by 9% to 22%.

Implications of raising cigarette excise taxes in Peru.

OBJECTIVE: To assess how raising cigarette excise taxes in Peru might impact cigarette consumption, and to determine if higher taxes would be regressive. METHODS: Total demand price elasticity was estimated by income groups using two datasets: quarterly time-series data from 1993 - 2012 and data from a cross-sectional survey of income and expenses conducted in 2008 - 2009 . A functional form of the cigarette demand in Peru was specified using the quarterly data set, and the demand price elasticity was estimated for the short and long run. Using the second data set and Deaton methodology, the implementation of elasticity estimation and by groups' elasticity was done in a two-step procedure. RESULTS: Demand price elasticity was -0.7, implying that a 10% price increase via a new tax would reduce consumption by 7%. Demand price elasticity estimations by income group suggested that poorer families are not more price sensitive than richer ones, which implies that increasing cigarette taxes could be regressive. CONCLUSIONS: Increasing cigarette taxes is the most efficient policy for inducing a reduction in smoking. However, in the case of Peru, an increase in cigarette taxes could be regressive.

Implications of raising cigarette excise taxes in Peru / Efectos de aumentar los impuestos indirectos sobre tabaco en el Perú

Objective. To assess how raising cigarette excise taxes in Peru might impact cigarette consumption, and to determine if higher taxes would be regressive. Methods. Total demand price elasticity was estimated by income groups using two datasets: quarterly time-series data from 1993 – 2012 and data from a cross-sectional survey of income and expenses conducted in 2008 – 2009 . A functional form of the cigarette demand in Peru was specified using the quarterly data set, and the demand price elasticity was estimated for the short and long run. Using the second data set and Deaton methodology, the implementation of elasticity estimation and by groups’ elasticity was done in a two-step procedure. Results. Demand price elasticity was -0.7, implying that a 10% price increase via a new tax would reduce consumption by 7%. Demand price elasticity estimations by income group suggested that poorer families are not more price sensitive than richer ones, which implies that increasing cigarette taxes could be regressive. Conclusions. Increasing cigarette taxes is the most efficient policy for inducing a reduction in smoking. However, in the case of Peru, an increase in cigarette taxes could be regressive.

Objetivo. Examinar los efectos que podría tener un aumento de los impuestos indirectos sobre el tabaco en el Perú sobre el consumo de cigarrillos y determinar si el alza de los impuestos tendría un efecto regresivo. Métodos. La elasticidad de la demanda total en función del precio se determinó, por grupos de ingreso, a partir de dos conjuntos de datos: datos trimestrales de series cronológicas para el período de 1993 al 2012 y datos obtenidos en una encuesta transversal de ingresos y gastos para el período del 2008 al 2009. El tipo de función matemática que capta la demanda de cigarrillos en el Perú se determinó a partir de los datos trimestrales; la elasticidad de la demanda en función del precio se calculó tanto para el corto como para el largo plazo. El segundo conjunto de datos y el método de Deaton se usaron para calcular en dos pasos la elasticidad y la elasticidad por grupos. Resultados. La elasticidad de la demanda en función del precio fue de -0,7. Esto implica que un aumento de precio de 10% por efecto de un impuesto nuevo reduciría el consumo en 7%. Los cálculos de la elasticidad de la demanda en función del precio por grupos de ingreso revelaron que las familias más pobres no reaccionan más a los cambios de precio que las familias más prósperas, o sea, que un aumento de los impuestos sobre el tabaco podría tener un efecto regresivo. Conclusiones. El aumento de los impuestos sobre el tabaco es la política más eficiente para reducir el tabaquismo. Sin embargo, en el caso del Perú dicho aumento podría tener consecuencias regresivas.

La demanda de cigarrillos y el aumento de impuestos en El Salvador / Demand for cigarettes and tax increases in El Salvador

Objetivo. Analizar las elasticidades de corto plazo y de largo plazo de la demanda de cigarrillos en El Salvador como instrumento para apoyar recomendaciones sobre aumentos de impuestos para reducir la prevalencia y el consumo vía aumento de precios. Métodos. Se analizó la demanda de cigarrillos en El Salvador mediante un modelo econométrico de series de tiempo con una base de datos proveniente de la Dirección General de Impuestos Internos (DGII) y la Dirección General de Estadística y Censos (DIGESTYC) de El Salvador. El período de análisis fue trimestral: 2000Q1-2012T4. Se realizaron las pruebas habituales para evitar que la estimación econométrica fuera espuria. Se halló que las variables ventas en volumen, los precios reales de venta y el ingreso real per cápita estaban cointegradas de primer orden; este resultado permite utilizar un modelo de corrección de error con estimaciones de las elasticidades en el corto plazo y en el largo plazo. Resultados. Se halló que solo las elasticidades de largo plazo son estadísticamente significativas al 5% de probabilidad. Los resultados señalan una elasticidad precio de largo plazo (cinco trimestres) de -0,9287 e ingreso de 0,9978. Conclusiones. El nivel del valor absoluto de la elasticidad precio es algo elevada, aunque está dentro de los niveles estimados en otros estudios en los países de menores ingresos per cápita. Un aumento del impuesto de un monto base de USD (dólares estadounidenses) 1,04 por cajetilla de 20 cigarrillos a USD 1,66 en un período de tres años reduciría la demanda entre 20% y 31% y aumentaría los ingresos fiscales entre 9% y 22%.

Objective. Analyze short- and long-term elasticities of demand for cigarettes in El Salvador as a tool for supporting recommendations on tax increases to reduce prevalence and consumption through price increases. Methods. Demand for cigarettes in El Salvador was analyzed through an econometric time-series model using a database from El Salvador’s General Directorate of Internal Taxes (DGII) and the General Directorate of Statistics and Census (DIGESTYC). The analysis period was quarterly: 2000Q1-2012Q4. The usual tests were done to prevent a spurious econometric estimation. It was found that the variables volume sales, actual sale prices, and actual per capita income exhibited first-order cointegration; this result makes it possible to use an error correction model with short- and long-term elasticity estimates. Results. Only long-term elasticities were found to be statistically significant to 5%. Results show long-term price elasticity (5 quarters) of –0.9287 and income price elasticity of 0.9978. Conclusions. Absolute price elasticity is somewhat high, although it is within the levels estimated in other studies in low per-capita income countries. A tax increase from a base amount of US$1.04 per pack of 20 cigarettes to US$1.66 within three years would reduce demand by 20% to 31% and would increase tax revenues by 9% to 22%.

La demanda de cigarrillos y el aumento de impuestos en El Salvador / Demand for cigarettes and tax increases in El Salvador

RESUMEN Objetivo Analizar las elasticidades de corto plazo y de largo plazo de la demanda de cigarrillos en El Salvador como instrumento para apoyar recomendaciones sobre aumentos de impuestos para reducir la prevalencia y el consumo vía aumento de precios. Métodos Se analizó la demanda de cigarrillos en El Salvador mediante un modelo econométrico de series de tiempo con una base de datos proveniente de la Dirección General de Impuestos Internos (DGII) y la Dirección General de Estadística y Censos (DIGESTYC) de El Salvador. El período de análisis fue trimestral: 2000Q1-2012T4. Se realizaron las pruebas habituales para evitar que la estimación econométrica fuera espuria. Se halló que las variables ventas en volumen, los precios reales de venta y el ingreso real per cápita estaban cointegradas de primer orden; este resultado permite utilizar un modelo de corrección de error con estimaciones de las elasticidades en el corto plazo y en el largo plazo. Resultados Se halló que solo las elasticidades de largo plazo son estadísticamente significativas al 5% de probabilidad. Los resultados señalan una elasticidad precio de largo plazo (cinco trimestres) de -0,9287 e ingreso de 0,9978. Conclusiones El nivel del valor absoluto de la elasticidad precio es algo elevada, aunque está dentro de los niveles estimados en otros estudios en los países de menores ingresos per cápita. Un aumento del impuesto de un monto base de USD (dólares estadounidenses) 1,04 por cajetilla de 20 cigarrillos a USD 1,66 en un período de tres años reduciría la demanda entre 20% y 31% y aumentaría los ingresos fiscales entre 9% y 22%.

ABSTRACT Objective Analyze short- and long-term elasticities of demand for cigarettes in El Salvador as a tool for supporting recommendations on tax increases to reduce prevalence and consumption through price increases. Methods Demand for cigarettes in El Salvador was analyzed through an econometric time-series model using a database from El Salvador’s General Directorate of Internal Taxes (DGII) and the General Directorate of Statistics and Census (DIGESTYC). The analysis period was quarterly: 2000Q1-2012Q4. The usual tests were done to prevent a spurious econometric estimation. It was found that the variables volume sales, actual sale prices, and actual per capita income exhibited first-order cointegration; this result makes it possible to use an error correction model with short- and long-term elasticity estimates. Results Only long-term elasticities were found to be statistically significant to 5%. Results show long-term price elasticity (5 quarters) of –0.9287 and income price elasticity of 0.9978. Conclusions Absolute price elasticity is somewhat high, although it is within the levels estimated in other studies in low per-capita income countries. A tax increase from a base amount of US$1.04 per pack of 20 cigarettes to US$1.66 within three years would reduce demand by 20% to 31% and would increase tax revenues by 9% to 22%.

Implications of raising cigarette excise taxes in Peru / Efectos de aumentar los impuestos indirectos sobre tabaco en el Perú

ABSTRACT Objective To assess how raising cigarette excise taxes in Peru might impact cigarette consumption, and to determine if higher taxes would be regressive. Methods Total demand price elasticity was estimated by income groups using two datasets: quarterly time-series data from 1993 – 2012 and data from a cross-sectional survey of income and expenses conducted in 2008 – 2009 . A functional form of the cigarette demand in Peru was specified using the quarterly data set, and the demand price elasticity was estimated for the short and long run. Using the second data set and Deaton methodology, the implementation of elasticity estimation and by groups’ elasticity was done in a two-step procedure. Results Demand price elasticity was −0.7, implying that a 10% price increase via a new tax would reduce consumption by 7%. Demand price elasticity estimations by income group suggested that poorer families are not more price sensitive than richer ones, which implies that increasing cigarette taxes could be regressive. Conclusions Increasing cigarette taxes is the most efficient policy for inducing a reduction in smoking. However, in the case of Peru, an increase in cigarette taxes could be regressive.

RESUMEN Objetivo Examinar los efectos que podría tener un aumento de los impuestos indirectos sobre el tabaco en el Perú sobre el consumo de cigarrillos y determinar si el alza de los impuestos tendría un efecto regresivo. Métodos La elasticidad de la demanda total en función del precio se determinó, por grupos de ingreso, a partir de dos conjuntos de datos: datos trimestrales de series cronológicas para el período de 1993 al 2012 y datos obtenidos en una encuesta transversal de ingresos y gastos para el período del 2008 al 2009. El tipo de función matemática que capta la demanda de cigarrillos en el Perú se determinó a partir de los datos trimestrales; la elasticidad de la demanda en función del precio se calculó tanto para el corto como para el largo plazo. El segundo conjunto de datos y el método de Deaton se usaron para calcular en dos pasos la elasticidad y la elasticidad por grupos. Resultados La elasticidad de la demanda en función del precio fue de -0,7. Esto implica que un aumento de precio de 10% por efecto de un impuesto nuevo reduciría el consumo en 7%. Los cálculos de la elasticidad de la demanda en función del precio por grupos de ingreso revelaron que las familias más pobres no reaccionan más a los cambios de precio que las familias más prósperas, o sea, que un aumento de los impuestos sobre el tabaco podría tener un efecto regresivo. Conclusiones El aumento de los impuestos sobre el tabaco es la política más eficiente para reducir el tabaquismo. Sin embargo, en el caso del Perú dicho aumento podría tener consecuencias regresivas.

Real price and affordability as challenges for effective tobacco control policies: an analysis for Argentina.

OBJECTIVE: To describe the evolution of cigarettes' real price and affordability during the last decade in Argentina. METHODS: To analyze the real price of cigarettes, the weighted average monthly price of a pack of 20 cigarettes was divided by the consumer price index (CPI) from 2004 to 2014. The relative income price (RIP) was evaluated for the same period, defining RIP as the percentage of the income required to buy 100 packs of 20-per-pack cigarettes. The RIP was calculated for first-quartile, median, and third-quartile income groups. The lower the RIP, the higher the affordability. RESULTS: The nominal price of a pack of 20 cigarettes sold in Argentina increased from AR$ 2.24 in March 2004 to AR$ 14.36 in June 2014 (nominal price increase of about 19.7% per year). The real price fell from AR$ 2.24 in March 2004 to AR$ 2.11 in June 2014 (real price drop of about 0.6% per year). Between June 2004 and June 2014, the RIP decreased about 39% for the 3rd quartile income group (from 31.3% to 19.2%), about 42% for the median (from 55.7% to 32.0%), and about 50% for the 1st quartile (from 104.4% to 51.8%). CONCLUSIONS: In Argentina, inflation and rising income were greater than growth in cigarette prices. Cigarette affordability increased for each income group, with the highest shifts occurring among the poorest and most vulnerable income earners. The increased affordability of cigarettes might reduce the impact of implemented tobacco control policies.

Real price and affordability as challenges for effective tobacco control policies: an analysis for Argentina / El precio real y la asequibilidad como obstáculos para las políticas de control del tabaquismo: análisis de la situación en la Argentina

Objective. To describe the evolution of cigarettes' real price and affordability during the last decade in Argentina. Methods. To analyze the real price of cigarettes, the weighted average monthly price of a pack of 20 cigarettes was divided by the consumer price index (CPI) from 2004 to 2014. The relative income price (RIP) was evaluated for the same period, defining RIP as the percentage of the income required to buy 100 packs of 20-per-pack cigarettes. The RIP was calculated for first-quartile, median, and third-quartile income groups. The lower the RIP, the higher the affordability. Results. The nominal price of a pack of 20 cigarettes sold in Argentina increased from AR$ 2.24 in March 2004 to AR$ 14.36 in June 2014 (nominal price increase of about 19.7% per year). The real price fell from AR$ 2.24 in March 2004 to AR$ 2.11 in June 2014 (real price drop of about 0.6% per year). Between June 2004 and June 2014, the RIP decreased about 39% for the 3rd quartile income group (from 31.3% to 19.2%), about 42% for the median (from 55.7% to 32.0%), and about 50% for the 1st quartile (from 104.4% to 51.8%). Conclusions. In Argentina, inflation and rising income were greater than growth in cigarette prices. Cigarette affordability increased for each income group, with the highest shifts occurring among the poorest and most vulnerable income earners. The increased affordability of cigarettes might reduce the impact of implemented tobacco control policies.

Objetivo. Describir la evolución del precio real y la asequibilidad de los cigarrillos durante la última década en la Argentina. Métodos. Para analizar el precio real de los cigarrillos, se dividió todos los meses el promedio ponderado del precio de un paquete de 20 cigarrillos por el índice de precios al consumidor entre el 2004 y el 2014. Se calculó durante el mismo período el precio relativo a los ingresos, definido como el porcentaje de los ingresos necesario para adquirir 100 paquetes de 20 cigarrillos. Se calculó el precio relativo a los ingresos en los cuartiles primero, segundo y tercero de los grupos de ingresos. Cuanto más bajo es el precio relativo a los ingresos, mayor es la asequibilidad. Resultados. El precio nominal en la Argentina de un paquete de 20 cigarrillos pasó de los 2,24 pesos de marzo del 2004 a los 14,36 pesos de junio del 2014 (un aumento próximo a 19,7% por año). El precio real pasó de 2,24 pesos en marzo del 2004 a 2,11 pesos en junio del 2014 (reducción real de cerca de 0,6% por año). Entre junio del 2004 y junio del 2014, el precio relativo a los ingresos se redujo cerca de 39% en el tercer cuartil de ingresos (de 31,3% a 19,2%), 42% en la mediana (de 55,7% a 32,0%) y cerca de 50% en el primer cuartil (de 104,4% a 51,8%). Conclusiones. En la Argentina, la inflación y el aumento de los ingresos fueron mayores que el crecimiento de los precios de los cigarrillos. La asequibilidad de los cigarrillos aumentó en todos los grupos de ingresos y las variaciones más acusadas se produjeron en los grupos más pobres y más vulnerables. La mayor asequibilidad de los cigarrillos puede reducir la repercusión de las políticas de control del tabaquismo llevadas a cabo.