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Distributional health and financial benefits of increased tobacco taxes in Colombia: results from a modelling study
  1. Erin Kinsella James1,
  2. Akshar Saxena1,
  3. Camila Franco Restrepo2,
  4. Blanca Llorente3,
  5. Andres I Vecino-Ortiz4,5,
  6. Manuela Villar Uribe6,
  7. Roberto F Iunes6,
  8. Stéphane Verguet1
  1. 1 Department of Global Health and Population, Harvard T H Chan School of Public Health, Boston, Massachusetts, USA
  2. 2 Ministry of Health and Social Protection, Bogotá, Colombia
  3. 3 Fundación Anáas, Bogotá, Colombia
  4. 4 Institute of Public Health, Universidad Javeriana, Bogotá, Colombia
  5. 5 Department of International Health, Johns Hopkins School of Public Health, Baltimore, Maryland, USA
  6. 6 The World Bank, Washington, District of Columbia, USA
  1. Correspondence to Dr. Stéphane Verguet; verguet{at}hsph.harvard.edu

Abstract

Background In Colombia, smoking is the second leading modifiable risk factor for premature mortality. In December 2016, Colombia passed a major tax increase on tobacco products in an effort to decrease smoking and improve population health. While tobacco taxes are known to be highly effective in reducing the prevalence of smoking, they are often criticised as being regressive in consumption. This analysis attempts to assess the distributional impact (across socioeconomic groups) of the new tax on selected health and financial outcomes.

Methods This study builds on extended cost-effectiveness analysis methods to study the new tobacco tax in Colombia, and estimates, over a time period of 20 years and across income quintiles of the current urban population (80% of the country population), the years of life gained with smoking cessation and the increased tax revenues, all associated with a 70% relative price increase of the pack of cigarettes. Where possible, we use parameters that vary by income quintile, including price elasticity of demand for cigarettes (average of −0.44 estimated from household survey data).

Findings Over 20 years, the tax increase would lead to an estimated 191 000 years of life gained among Colombia’s current urban population, with the largest gains among the bottom two income quintiles. The additional annual tax revenues raised would amount to about 2%–4% of Colombia’s annual government health expenditure, with the poorest quintiles bearing the smallest tax burden increase.

Conclusions The tobacco tax increase passed by Colombia has substantial implications for the country’s population health and financial well-being, with large benefits likely to accrue to the two poorest quintiles of the population.

  • smoking caused disease
  • taxation
  • socioeconomic status
  • disparities
  • economics

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Footnotes

  • Contributors EKJ conceived the analyses, collected the data, conducted the research, and wrote the first draft of the manuscript. SV designed and supervised the study. MVU collected survey data and conducted preliminary analyses. All authors contributed to drafting and critical revision of the manuscript and have approved the final article.

  • Funding Funding for this study was provided by the World Bank and the World Bank’s Global Tobacco Program, co-financed by the Bill & Melinda Gates Foundation and the Bloomberg Foundation. An earlier version of this paper was published as a World Bank working paper (James, Saxena, Franco Restrepo, et al. World Bank, Washington, DC 2017: https://openknowledge.worldbank.org/handle/10986/28598. License: CC BY 3.0 IGO) and was presented during seminars at the Ministry of Health and Social Protection and the Ministry of Finance and Public Credit, Colombia, and at the Harvard T H Chan School of Public Health, where we received valuable comments from seminar participants as well as from Andres Escobar, Alan Fuchs, Alejandro Gaviria, Patricio Marquez, Margaret McConnell, Francisco Meneses, Ece Özçelik, Michael Reich and Juanita Carolina Bodmer Rico. The findings, interpretations, and conclusions in this article are entirely those of the authors. Responsibility for the views and opinions expressed rests solely with the authors; they are not endorsed by any member institution of the World Bank Group, its Executive Directors, or the countries they represent.

  • Competing interests None declared.

  • Patient consent Not required.

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

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