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Effectiveness of tax and price policies in tobacco control
  1. Frank J Chaloupka1,
  2. Kurt Straif2,
  3. Maria E Leon3
  1. 1Economics, College of Business Administration, Health Policy and Administration, University of Illinois at Chicago, Chicago, Illinois, USA
  2. 2IARC Monographs, International Agency for Research on Cancer, Lyon, France
  3. 3Section of Environment and Radiation, International Agency for Research on Cancer, Lyon, France
  1. Correspondence to Maria E Leon, Section of Environment and Radiation, International Agency for Research on Cancer, 150 Cours Albert Thomas, 69372 Lyon Cedex 08, France; leonrouxm{at}iarc.fr
  • Competing interests None.

Abstract

Objective Over 20 experts on economics, epidemiology, public policy and tobacco control were asked by the International Agency for Research on Cancer (IARC) to evaluate the strength of the available evidence on the effects of tax and price policies to prevent and reduce tobacco use.

Methods Draft papers presenting and assessing the evidence on the following topics were developed by the experts in an 8-month period prior to the meeting: tobacco industry pricing strategies and tax related lobbying; tax, price and aggregate demand for tobacco; tax, price and adult tobacco use, use among young people and use among the poor; tax avoidance and tax evasion; and the economic and health impact of tobacco taxation. Subsequently, papers were peer reviewed, revised and resubmitted for final discussion at a 6-day meeting at IARC in Lyon, France, where a consensus evaluation of 18 concluding statements using the pre-established criteria of the IARC Cancer Prevention Handbooks took place. Studies published (or accepted for publication) in the openly available scientific literature were the main source of evidence for the review and evaluation; other types of publications were included when appropriate.

Results In support of 12 of the 18 conclusions, the experts agreed that there was sufficient evidence of effectiveness of increased tobacco excise taxes and prices in reducing overall tobacco consumption and prevalence of tobacco use and improvement of public health, including by preventing initiation and uptake among young people, promoting cessation among current users and lowering consumption among those who continue to use. For the remaining six concluding statements the evidence was strong (four statements) or limited (two statements).

Conclusions The evidence presented and assessed in IARC Handbook volume 14 documents the effectiveness of tax and price policies in the control of tobacco use and improvement of public health.

  • Taxes
  • price
  • tobacco
  • smoking/prevention and control
  • government regulation
  • economics, public policy
  • taxation and price
  • tobacco products
  • young adults

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Introduction

Article 6 of the WHO Framework Convention on Tobacco Control (FCTC) calls for parties (ie, countries who have legally signed and are bound to the treaty) to use tax and price policies on tobacco products to decrease tobacco use in the population.1

In May 2010 experts from 12 countries (the working group (WG), see Appendix) met at The International Agency for Research on Cancer (IARC) in Lyon, France to develop volume 14 of the IARC Handbooks of Cancer Prevention series on the evidence for the effectiveness of tax and price policies in tobacco control.2

Methods

Using the methodology established for IARC Handbooks,3 studies published (or accepted for publication up to the week of the meeting) in the openly available scientific literature were the main source of evidence for the review and evaluation. Peer-reviewed government agency reports that were widely available were also considered. In exceptional cases, reports that were in their final form and publicly available, but subjected to varying extent of peer review, were included if they were considered relevant to making an evaluation. The WG assessed the quality and limitations of the data when conducting their critical review and carried out a consensus evaluation of the strength of the evidence supporting 18 conclusion statements.

Results and conclusions

Table 1 presents the conclusion statements noting the strength of evidence in their support and providing brief comments and representative references to existing evidence. For 12 of the 18 statements the WG concluded that there was sufficient evidence. The majority of these related to the effectiveness of increased tobacco excise taxes and prices in reducing overall tobacco consumption and prevalence of tobacco use, including by promoting cessation among current users, preventing initiation and uptake among young people and lowering consumption among those who continue to use.

Table 1

Evidence for effectiveness of tax and price policies in tobacco control

The WG concluded that strong but not sufficient evidence supported four of the conclusion statements (see table); for example, that changes in the relative prices of tobacco products lead to some substitution with relatively less expensive products. While results from studies from a few countries report that increases in cigarette prices are associated with increased demand for other tobacco products, there are only a small number of these and additional research is needed to find out whether these findings apply elsewhere.

For two of the statements the WG considered there was only limited supporting evidence (see table); for instance, that the demand for tobacco products among low income populations in low-income and middle-income countries is more responsive to price than is the demand for tobacco products among high-income populations. The evidence examined is mixed and varies with a country's circumstances; for example, in settings where there is ready access to low or untaxed and inexpensive tobacco products, low-income tobacco users may be less sensitive to changes in prices.

Based on the extensive evidence reviewed, the WG recommended that ‘In order to improve public health by reducing tobacco use, governments should adopt relatively simple tobacco excise tax structures that emphasise specific taxes and that include regular tax increases that outpace growth in general price levels and incomes’.2 The WG added that governments should use tobacco tax revenues to fund comprehensive tobacco control programmes and other health promotion activities, given that such programmes lead to further reductions in tobacco use and improvements in population health. Finally, the WG recommended that a multinational surveillance and monitoring system should be implemented that regularly collects data on tobacco use among adults and young people, tobacco product taxes and prices, price-reducing marketing and lobbying efforts of tobacco companies, tax avoidance and evasion, and tax administration and enforcement activities.

Appendix

The Working Group developing IARC Handbook volume 14 (by country alphabetical order) and IARC Secretariat:

Attending meeting

FJ. Chaloupka, Chair (USA)

N. Nargis (Bangladesh; University of Dhaka, Dhaka),

L. Joossens (Belgium; Belgian Foundation against Cancer, Brussels)

L. Nguyen (Finland; National Institute for Health and Welfare, Helsinki)

L. Clancy, L. Currie (Ireland; Tobacco Free Research Institute, Dublin)

S. Gallus, C. La Vecchia (Italy; Istituto di Ricerche Farmacologiche Mario Negri, Milan)

F. Godfrey (Luxembourg; The Union (IUATLD), Weimerskirch)

C. Van Walbeek (South Africa; University of Cape Town, Cape Town)

E. Fernandez (Spain; Catalan Institute of Oncology, Barcelona)

S. Delipalla, AM Perucic (Switzerland; World Health Organization, Geneva)

Z. Onder (Turkey; Bilkent University, Ankara)

A. Gilmore, (United Kingdom; University of Bath, Bath)

E. Blecher, (USA; American Cancer Society, Atlanta)

TW. Hu, (USA; University of California, Berkeley)

D. Levy, (USA; HBSA of Pacific Institute for Research and Evaluation, Calverton)

H. Ross, (USA; American Cancer Society, Atlanta)

J. Tauras (USA; University of Illinois, Chicago)

Invited Specialist*

F. Van Driessche, (Belgium; European Commission, Brussels)

Contributing to Handbook volume 14 but unable to attend the meeting

R. Iglesias (Brasil; Alliance for Tobacco Control, Rio de Janeiro)

M. Pekurinen (Finland; National Institute for Health and Welfare, Helsinki)

A. Yurekli (Switzerland; World Health Organization, Geneva)

K. Smith (United Kingdom; University of Bath, Bath)

IARC Secretariat (France)

J. Daniel

F. Islami

ME. Leon

Q. Li

K. Straif

References

View Abstract

Footnotes

  • Funding European Commission Seventh Framework Programme through a comprehensive grant proposal that will also encompass original research on price and tax policies for better control of tobacco in Europe (PPACTE)(EC FP7 Grant Agreement HEALTH-F2-2009-223323): European Commission.

  • Provenance and peer review Not commissioned; externally peer reviewed.

  • * An Invited Specialist is an expert in the subject under assessment, but also has declared a conflicting interest. Under such circumstances, the expert does not participate in the evaluation process while his expertise guides the description of general remarks on the intervention under assessment.

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