HOME HELP FEEDBACK SUBSCRIPTIONS ARCHIVE SEARCH TABLE OF CONTENTS REGISTER		Author Keyword(s) Vol Page [Advanced]

This Article Full Text Full Text (PDF) Submit a response Alert me when this article is cited Alert me when eLetters are posted Alert me if a correction is posted Citation Map Services Email this link to a friend Similar articles in this journal Similar articles in PubMed Add article to my folders Download to citation manager Request Permissions Citing Articles Citing Articles via HighWire Citing Articles via Google Scholar Google Scholar Articles by Lee, J-M Articles by Liao, W-Z Search for Related Content PubMed PubMed Citation Articles by Lee, J-M Articles by Liao, W-Z

Effect of cigarette tax increase on cigarette consumption in Taiwan

¹ Department of Logistic Management, National Kaohsiung Marine University, Kaohsiung, Taiwan
² Department of Applied Economics, National Taiwan Ocean University, Keelung, Taiwan
³ Department of International Trade, Overseas Chinese Institute of Technology, Taichung, Taiwan
⁴ Department of Applied Economics, National Chung Hsing University, Taichung, Taiwan

Correspondence to:
Jie-Min Lee
Department of Logistic Management, National Kaohsiung Marine University, Kaohsiung, Taiwan; jmlee866{at}yahoo.com.tw

Objectives: This study evaluates the effect of a 5 New Taiwan Dollar (NT$5) Health and Welfare Tax increase on the consumption of domestic and imported cigarettes and cigars.

Methods: Using statistics published annually from 1971 through 2000, we set up a model based on the Central Bureau of Statistics (CBS) demand model to estimate price and expenditure elasticity coefficients of cigarettes and cigars.

Results: Our results showed that the price elasticity coefficients for domestic and imported cigarettes were –0.644 and –0.822. The consumption of imported cigarettes was reduced by 7.51 packs per capita, and the consumption of domestic cigarettes was reduced by 15.21 packs per capita. Total per capita consumption of cigarettes was reduced by 22.72 packs (18%).

Conclusions: From the public health and financial perspectives, the increase in this excise tax on tobacco to the Taiwan government will have significant effect in reducing cigarette consumption; it will also generate additional tax revenues.

Abbreviations: CBS, Central Bureau of Statistics; GDP, gross domestic product; TTWMB, Taiwan Tobacco and Wine Monopoly Bureau; WTO, World Trade Organization

Keywords: consumption; price elasticity; tax

This article has been cited by other articles:

				R. Hanewinkel and B. Isensee Five in a row--reactions of smokers to tobacco tax increases: population-based cross-sectional studies in Germany 2001-2006 Tob. Control, February 1, 2007; 16(1): 34 - 37. [Abstract] [Full Text] [PDF]

				Minerva BMJ, June 25, 2005; 330(7506): 1516 - 1516. [Full Text] [PDF]