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Price smoking participation elasticity in Colombia: estimates by age and socioeconomic level
  1. Juan Miguel Gallego,
  2. Susana Otálvaro-Ramírez,
  3. Paul Andres Rodriguez-Lesmes
  1. Facultad de Economía, Universidad Del Rosario, Bogota, Colombia
  1. Correspondence to Dr Juan Miguel Gallego, Facultad de Economía, Universidad Del Rosario, 111711, Bogotá, Colombia; juan.gallego{at}urosario.edu.co

Abstract

Background Tobacco prevalence in Colombia is small compared with other Latin America despite the nation’s tobacco taxes being among the lowest in the region. However, tobacco taxes have increased several times during the last decade, and large increases in 2010 and 2016 impacted consumer prices.

Objective This paper aims to estimate the price smoking participation elasticity (PPE) in Colombia, with specific reference to regional increases in consumer prices after 2010 tax policy changes.

Methods The PPE is computed using logistic regression based on individual-level data from the National Psychoactive Substances Consumption Survey for 2008 and 2013. Our specific focus is state-level variation in Colombian cigarette prices between 2008 and 2013 induced by the tax hike in 2010.

Results The estimated PPE in Colombia is around −0.66 (p value=0.046). We find almost no differences across socioeconomic level, but price sensitivity was greater for women than men, and for relatively older individuals (ages 51–64).

Conclusions PPE for Colombia is above estimates for comparable middle-income countries such as Mexico. As a result, current estimates for health gains of tax policies are likely to be underestimated. Moreover, in contrast with the literature, we find that the PPE for the youth (≤25 years) is lower than older age groups, and there is no evidence of a prominent socio-economic status (SES) gradient.

  • economics
  • low-income and middle-income countries
  • price
  • socioeconomic status
  • taxation
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Footnotes

  • Twitter @JuanMGallego1, @androdri

  • Contributors Each author contributed in the same amount to this project.

  • Funding This project was funded under the GADC project by the CIHR/IDRC [grant number 108442-001]. Data and code for replicating these exercises can be obtained at: https://github.com/androdri1/PPEColombia.

  • Competing interests None declared.

  • Patient consent for publication Not required.

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

  • Data availability statement Data are available in a public, open access repository. Scripts and final datasets are available in the repository: https://github.com/androdri1/PPEColombia.

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