Price
4 Results
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News
Price elasticity or affordability elasticity? A puzzle solved for practitioners of tobacco taxation
Price elasticity measures the sensitivity of consumers to changes in real prices, holding real income constant, while affordability elasticity measures the sensitivity of consumers to price changes adjusted for inflation and income changes. The existing scientific literature on tobacco demand abounds in both price and affordability elasticity estimates, without providing a clear explanation of the…
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News
Why Increasing Tobacco Taxes in El Salvador is an Excellent Idea
Currently, about 430,000 people smoke in El Salvador, roughly half of them will die from tobacco consumption. A significant proportion of young Salvadorans (one in ten) consume tobacco, which typically translates into higher healthcare costs and, for many, illnesses that will disable them and / or lead to death. Every year, about 1,600 people die…
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News
Cigarette consumption has been increasing in Bangladesh even after a decade of tax and price increases: What went wrong?
Despite a high share of tax in price (greater than the WHO’s 75% benchmark) with periodic tax and price increases, cigarette consumption has been increasing in Bangladesh over the last decade. Between 2006-07 and 2016-17, the volume of tax-paid cigarette sales increased by 83%. At the same time, the share of low-price cigarette consumption increased…
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News
Differences in cigarette prices across EU Member States affect cross-border cigarette purchases
The European Union (EU) has been one of the world’s champions of high cigarette excise taxes. Thanks in part to its Tobacco Tax Directive, the EU is the region with the highest average cigarette prices in the world. As we wrote in a previous blog post, the European Commission is, encouragingly, working on a possible…