Tobacco Control in Developing Countries Tobacco Control in Developing Countries
The World Bank World Health Organization
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Tobacco Control in Developing Countries Tobacco Control in Developing Countries The World Bank World Health Organization Curbing the Epidemic Curbing the Epidemic Governments and the Economics of Tobacco Control Governments and the Economics
The World Bank World Health Organization
I I In 1996
I I
Source: Tobacco Control 1996, The Economist 1997
N N Cape Town Proceedings published in 1998
N N 40 economists, epidemiologists, and control experts
N N Reviews of literature
N N New analyses
N N 2 rounds of peer review
500 1000 1500 2000 2500 3000 3500 1970-72 1980-82 1990-92 Year Annual per adult cigarette consumption Developed Developing World
Source: WHO 1997
Source: Peto and Lopez, 2000
25% 35% 45% 55% 65% 75% 85% 1955 1960 1965 1970 1975 1980 1985 1990 Year Male smoking prevalence
High income Low income
Source: Lund et al., 1995
Source: Gajalakshmi and Peto 1997
6 4 % 5 8 % 4 2 % 2 1 % 0 % 2 0 % 4 0 % 6 0 % Illiterate < 6 y e a r s 6 - 1 2 years > 1 2 years L e n g t h o f s c h o o l i n g Smoking prevalence
Source: Bobak et al., 2000
5% 9% 19% 1% 1% 5% 21% 22% 28% 0% 10% 20% 30% 40% 50% 60% Higher Secondary Primary Other causes Attributed to SMOKING but would have died anyway at ages 35-69 Attributed to SMOKING
N N Lack of information and unwillingness to
N N Regret habit later, but many addicted
N N Costs of environmental tobacco smoke
Source: Jha et al., 2000
Source: Chinese Academy of Preventive Medicine 1997, Gupta 1996, US Surgeon General Reports, 1989
I I Every day 80,000 to 100,000 youths
C h i n a (males,1996) India (males, 1995) U S (both sexes, born 1952-61) U S (both sexes, born 1910-14)
20 40 60 80 100 15 20 25 Age Cumulative uptake in percent
N N in high-income countries, 7 in 10 smokers wish they
Source: Kenkel and Chen, 2000; Weinstein, 1998; SGR, 1989 and 1994
N N 125 die from smoking in middle-age
N N 20 die from road accidents or violence (30 from all
Source: Jha et al., 2000
N N 0.1-1.1% of GDP, or
N N proportionally similar in lower-income countries
N N Differences in lifetime costs are smaller than annual
N N Best studies do suggest there are net lifetime costs
N N Pension or “smokers pay their way” arguments are
Source: Lightwood et al., 2000
N N First-best instrument, such as youth restrictions, are
N N Tax increases are blunt instruments.
Source: Jha et al., 2000
Source: An Inquiry into the Nature and Causes of The Wealth of Nations, Book V, Chapter III, pages 474-476, 1776;
340 520 70 500 220 190 100 200 300 400 500 1950 2000 2025 2050 Year Tobacco deaths (million) Baseline If proportion of young adults taking up smoking halves by 2020 If adult consumption halves by 2020
Source: Peto and Lopez, 2000
N N 4% in high-income countries
N N 8% in low or middle-income countries
Source: Chaloupka et al., 2000
Real price of cigarettes and annual per adult cigarette consumption in South Africa 1970-1989
Real price of cigarettes and annual per adult cigarette consumption in South Africa 1970-1989
Source: Saloojee 1995
0.05 0.06 0.07 0.08 0.09 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 Year Cigarette consumption per adult (in packs) 0.7 0.8 0.9 1 1.1 1.2 1.3 Real Price Real price Consumption per adult
Source: Townsend 1998
9000 10000 11000 12000 13000 14000 15000 16000 17000 1971 1974 1977 1980 1983 1986 1989 1992 1995 Year £ 1.25 £ 1.45 £ 1.65 £ 1.85 £ 2.05 £ 2.25 £ 2.45 £ 2.65 Price (£) 1994 value
PRICE
CONSUMPTION
N N
Source: Chaloupka et al., 2000
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50
High Income Upper Middle Income Lower Middle Income Low Income
Countries by income Average price or tax per pack (US$)
10 20 30 40 50 60 70 80
Tax as a percentage of price
Average price in US$ Average tax in US$ Tax as a percentage of price
Source: Chaloupka et al., 2000
Country Time Event Immediate reduction in cigarette consumption The US 1964 Surgeon General Report 1-2% UK 1962 1st report of the Royal College of Physicians 5% Switzerland 1966 An anti-smoking campaign 11% Turkey 1982 Implementation of health warning labels 8%
Source: Kenkel and Chen, 2000
(n=102 countries)
(n=102 countries)
No Ban Ban 1450 1500 1550 1600 1650 1700 1750 1981 1991 Year Cigarette consumption per capita
Source: Saffer, 2000
Source: Saffer, 2000
I I NRTs double the effectiveness of cessation
I I Governments may widen access to NRT and
N Reducing regulation
N Conducting more studies on cost-effectiveness
N Considering NRT subsidies for poorest smokers
Source: Novotny et al., 2000
Price increases Non-price measures Price increases Non-price measures Low/Middle Income
High Income
World
Source: Ranson et al., 2000
Source: Jacobs et al., 2000; Woolery et al., 2000; Taylor et al., 2000
Source: Taylor et al., 2000
N N a 10% tax increase would raise revenue by 7%
0.1 0.2 0.3 0.4 0.5 0.6 1 9 6 1 9 6 2 1 9 6 4 1 9 6 6 1 9 6 8 1 9 7 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 1 9 8 1 9 8 2 1 9 8 4 1 9 8 6 1 9 8 8 1 9 9 1 9 9 2 1 9 9 4 Year Real cigarette tax rate per pack (aveage for all states) 10 20 30 40 50 60 70 80 Real cigarette tax revenue in millions of US$ real cigarette tax rate real cigarette tax revenue
Source: Sunley et al., 2000
0.001 0.002 0.003 0.004 0.005 0.006 0.007 0.008 1 9 7 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 1 9 8 1 9 8 2 1 9 8 4 1 9 8 6 1 9 8 8 1 9 9 1 9 9 2 1 9 9 4 1 9 9 6 Year R e a l c i g a r e t t e t a x r a t e s p e r p a c k i n c
s t a n t 1 9 9 Z i m b a b w e d
l a r s 100000 200000 300000 400000 500000 600000 700000 R e a l c i g a r e t t e t a x r a t e s p e r p a c k i n c
s t a n t 1 9 9 Z i m b a b w e d
l a r s Real tax per pack Real tax revenue
Source: Sunley et al., 2000
Type of country Name and year Net change as % of economy in base year given
Net Exporters
US (1993) 0% UK (1990) +0.5% Zimbabwe (1980)
Balanced Tobacco Economies
South Africa (1995) +0.4% Scotland (1989) +0.3%
Net Importers
Bangladesh (1994) +18.7%
Source:Buck and others, 1995; Irvine and Sims, 1997; McNicoll and Boyle 1992, van der Merwe and others, background paper; Warner and others 1996
I I Industry has economic incentive to smuggle
N N Increase market share and decrease tax rates
I I Best estimate: 6 to 8.5% of total consumption
I I Non-price variables important
N N Perceived level of corruption more important than cigarette
I I Tax increase will lead to revenue increase, even in the
Source: Merrriman et al. 2000; Joosens, 2000; BAT,1998
Brazil Pakistan Cambodia Indonesia Sweden Austria
y = - 0.02x + 0.2174 R2 = 0.2723
0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 2 4 6 8 10 Transparency index for country Smuggling as a share of consumption (%)
Source: Merriman et al., 2000
I I Countries need not make a choice between higher
N N Higher tax rates can achieve both
I I Effective control measures of smuggling exist
N N Focus on large container smuggling
N N Prominent local language warnings and tax stamps
N N Increase penalties
N N Licensing and tracking of containers
N N Increase export duties or bonds
I I Multilateral tax increases help combat smuggling
Source: Merrriman Source: Merrriman et al. et al. 2000;Joosens, 2000; BAT, 1998 2000;Joosens, 2000; BAT, 1998
Tax reduced in an attempt to counter smuggling I V
1 2 3 4 5 6 7 1989 1990 1991 1992 1993 1994 1995 Real price per pack (USD) 10 20 30 40 50 60 70 80 90 Annual cigarette consumption per capita (in packs) Real Price Consumption
Source: World Bank, 1999
I I Increased excise tax from 38 to 50% of retail price
N N Smuggling rose from 0 to 6%
N N Sales fell 20%
N N Revenue went up 2 fold
I I Lowered tax in response to organized smuggling
N N Retail price fell by half
N N Total consumption rose 48%, more so in young
N N Average revenue per capita fell by 35%
Source: Abedian, 1998; Sweanor, 1998 Source: Abedian, 1998; Sweanor, 1998
Source: * Econometric estimates from Merriman Source: * Econometric estimates from Merriman et al. et al., 2000 , 2000
US dollars per healthy year life gained
US dollars per healthy year life gained
Note: 3% discount rate, costs for non-price measures and all benefits projected over 30 years Source: Ranson et al., 2000
I I Tobacco deaths worldwide are large and growing,
I I Specific market failures support government
I I Demand measures, chiefly tax increases,
I I Control of smuggling is the major supply-side
I I Tobacco control is cost-effective
N N cigarette tax increases: 2/3 to 4/5 of retail price
N N consumer information, research, advertising and
N N widen access to NRT and other cessation therapies