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Research paper
Association between tax structure and cigarette consumption: findings from the International Tobacco Control Policy Evaluation (ITC) Project
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  1. Ce Shang1,
  2. Hye Myung Lee2,
  3. Frank J Chaloupka1,2,
  4. Geoffrey T Fong3,4,
  5. Mary Thompson5,
  6. Richard J O’Connor6
  1. 1 Health Policy Center, Institute for Health Research and Policy, University of Illinois at Chicago, Chicago, Illinois, USA
  2. 2 Division of Health Policy and Administration, School of Public Health, University of Illinois at Chicago, Chicago, Illinois, USA
  3. 3 Department of Psychology, University of Waterloo, Waterloo, Ontario, Canada
  4. 4 Ontario Institute for Cancer Research, Toronto, Ontario, Canada
  5. 5 Department of Statistics and Actuarial Science, University of Waterloo, Waterloo, Ontario, Canada
  6. 6 Division of Cancer Prevention and Population Sciences, Department of Health Behavior, Roswell Park Cancer Institute, Buffalo, New York, USA
  1. Correspondence to Dr Ce Shang, Health Policy Center, Institute for Health Research and Policy, University of Illinois at Chicago, Chicago, IL 60607, USA; cshang{at}uic.edu

Abstract

Background Recent studies show that greater price variability and more opportunities for tax avoidance are associated with tax structures that depart from a specific uniform one. These findings indicate that tax structures other than a specific uniform one may lead to more cigarette consumption.

Objective This paper aims to examine how cigarette tax structure is associated with cigarette consumption.

Methods We used survey data taken from the International Tobacco Control Policy Evaluation Project in 17 countries to conduct the analysis. Self-reported cigarette consumption was aggregated to average measures for each surveyed country and wave. The effect of tax structures on cigarette consumption was estimated using generalised estimating equations after adjusting for sociodemographic characteristics, average taxes and year fixed effects.

Findings Our study provides important empirical evidence of a relationship between tax structure and cigarette consumption. We find that a change from a specific to an ad valorem structure is associated with a 6%–11% higher cigarette consumption. In addition, a change from uniform to tiered structure is associated with a 34%–65% higher cigarette consumption. The results are consistent with existing evidence and suggest that a uniform and specific tax structure is the most effective tax structure for reducing tobacco consumption.

  • taxation
  • economics
  • global health

https://doi.org/10.1136/tobaccocontrol-2017-054160

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    Footnotes

    • Contributors CS and HML conducted the analyses and wrote the manuscript. All authors contributed to study design and reports interpretation. The findings and conclusions in this article are those of the authors.

    • Funding CS is funded by 1K99AA024810 (NIAAA). The earlier data cleaning work was funded by 1P01CA138389-05 (RJOC). The Waves 1–8 of the ITC-4 Country Survey were supported by Roswell Park Transdisciplinary Tobacco Use Research Center (grants R01 CA 100362 and P50 CA111236), the National Cancer Institute of the USA (R01 CA090955 and P01 CA138389), Robert Wood Johnson Foundation (045734), Canadian Institutes of Health Research (MOP-57897, MOP-79551 and MOP-115016), Commonwealth Department of Health and Aging (AU Waves 1 and 2 only), Canadian Tobacco Control Research Initiative (014578), National Health and Medical Research Council of Australia (265903, 450110, 1005922), and Cancer Research UK (C312/A3726, C312/A6465, C321/A11039, C25586/A19540). The Waves 1–6 of the ITC Netherlands Surveys were supported by The Netherlands Organisation for Health Research and Development (ZonMw; 70000001, 121010008). The SILNE Project is funded by the European Commission through FP7 HEALTH-F3-2011-278273. The Waves 1–3 of the ITC Germany Survey were supported by German Federal Ministry of Health, Dieter Mennekes-Umweltstiftung, and Germany Cancer Research Center (DKFZ). The Waves 1–3 of the ITC France Survey were supported by Observatoire français des drogues et des toxicomanies (OFDT), Institut national de prevention et d’education pour la sante (INPES), and Institut nationale du cancer (INCa). The Waves 1–3 of the ITC Korea Survey were supported by grants from the US National Cancer Institute (R01 CA125116), the Roswell Park Transdisciplinary Tobacco Use Research Center (P50 CA111236), the Korean Ministry of Health and Welfare, and the Korean National Cancer Center (0731040-1). The Waves 1–6 of the ITC Mexico Survey were supported by the Mexican Consejo Nacional de Ciencia y Tecnología (Salud-2007-C01-70032), Bloomberg Global Initiative–International Union Against Tuberculosis and Lung Disease (IUATLD), and the Roswell Park Transdisciplinary Tobacco Use Research Center from the National Cancer Institute at the National Institutes of Health (P50 CA111236). The Waves 1 and 2 of the ITC Brazil Survey were supported by the Brazilian Ministry of Health, National Cancer Institute José Alencar Gomes da Silva (INCA), Brazilian Ministry of Justice, National Secretariat for Drug Policy (SENAD), and the Canadian Institutes of Health Research (115016). The Waves 1–4 of the ITC Uruguay Survey were supported by Roswell Park Transdisciplinary Tobacco Use Research Center (grant P50 CA111236) and the US National Cancer Institute (P01 CA138389), International Development Research Centre (IDRC), and Canadian Institutes of Health Research (115016). The Waves 1–3 of the ITC Mauritius Survey were supported by the International Development Research Centre (Waves 1 and 2), the Canadian Institutes of Health Research (115016), and partially supported by the World Lung Foundation (Wave 3). The Waves 1 and 2 of the Tobacco Control Project (TCP) India Survey were supported by grants from the US National Cancer Institute (P50 CA111236, P01 CA138389) and Canadian Institute of Health Research (79551, 115016, 118096). The Waves 1–3 of the ITC Bangladesh Survey were supported by the International Development Research Centre (IDRC grant 104831-003), the US National Cancer Institute (P01 CA138389), and Canadian Institutes for Health Research (79551, 115016). The Waves 1–4 of the ITC China Project were supported by grants from the US National Cancer Institute at the National Institutes of Health (R01 CA125116), the Roswell Park Transdisciplinary Tobacco Use Research Center (P50 CA111236), Canadian Institutes for Health Research (79551, 115016), and Chinese Center for Disease Control and Prevention. The Waves 1–5 of the ITC Thailand Survey and Waves 1–5 ITC Malaysia were supported by Roswell Park Transdisciplinary Tobacco Use Research Center (grant P50 CA111236) and the US National Cancer Institute (P01 CA138389), Canadian Institutes of Health Research (79551, 115016), ThaiHealth Promotion Foundation, and the Malaysian Ministry of Health. Additional support in preparing this paper was provided to University of Waterloo by the Canadian Institutes of Health Research (FDN-148477).

    • Competing interests None declared.

    • Patient consent Obtained.

    • Ethics approval Ethics clearances were received from Office of Research Ethics, University of Waterloo, Canada and from the respective country’s internal review board.

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

    • Correction notice This article has been corrected since it was published Online First. Data values were accidentally interchanged in two separate sentences. Additional funding details have also been added.