Potential Distributional Health & Financial Benefits of Increased Tobacco Taxes in Ethiopia: Findings from a Modeling Study
2022
This study evaluates the potential impacts of Ethiopia's tobacco tax increase in 2020, which raised cigarette prices by approximately 67%. Employing parameters such as price elasticity of demand and smoking prevalence, the analysis utilizes existing literature and secondary data to model the effects of the reform on various outcomes, focusing on life years, tax revenues, cigarette expenditures, and catastrophic health expenditures (CHE). Concentrating solely on male smokers due to low female smoking rates, the results suggest that the tax hike could prompt a significant portion of smokers to quit, potentially saving nearly eight million life years and increasing tax revenues by $26 million in the first year. The burden of increased taxes falls predominantly on the richest quintile, while the poorest quintile is least affected. Furthermore, the policy is projected to decrease deaths from smoking-related diseases and prevent up to 173,000 cases of CHE. The analysis underscores the potential of cigarette tax increases in low-smoking prevalence countries to further reduce smoking rates, offering protection against future health and financial consequences, with progressive effects across income levels.
Source:
Chakrabarti A, Memirie ST, Yigletu S, Mirutse MK, Verguet S. The Potential Distributional Health and Financial Benefits of Increased Tobacco Taxes in Ethiopia: Findings from a Modeling Study. Social Science & Medicine - Population Health 2022; 18: 101097. https://doi.org/10.1016/j.ssmph.2022.101097