The Distributional Impacts of Cigarette Taxation in Bangladesh

Despite the obvious positive health impacts of tobacco taxation, an argument raised against it is that poor households bear the burden of the increased prices because of their higher share of spending on tobacco. This note includes estimates of the...

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Main Authors:	Del Carmen, Giselle, Fuchs, Alan, Genoni, Maria Eugenia
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2018
Subjects:	INEQUALITY INCOME DISTRIBUTION TOBACCO TAX TOBACCO PRICE TAXATION
Online Access:	http://documents.worldbank.org/curated/en/688821536776691954/The-Distributional-Impacts-of-Cigarette-Taxation-in-Bangladesh http://hdl.handle.net/10986/30424

id	okr-10986-30424
recordtype	oai_dc
spelling	okr-10986-304242021-06-08T14:42:47Z The Distributional Impacts of Cigarette Taxation in Bangladesh Del Carmen, Giselle Fuchs, Alan Genoni, Maria Eugenia INEQUALITY INCOME DISTRIBUTION TOBACCO TAX TOBACCO PRICE TAXATION Despite the obvious positive health impacts of tobacco taxation, an argument raised against it is that poor households bear the burden of the increased prices because of their higher share of spending on tobacco. This note includes estimates of the distributional impacts of price rises on cigarettes under various scenarios using the Household Income and Expenditure Survey 2016/17. One contribution of this analysis is to quantify the impacts by allowing price elasticities to vary across consumption deciles. This shows that an increase in the price of cigarettes in Bangladesh has small consumption impacts and does not significantly change the poverty rate or consumption inequality. These findings stem from relatively even cigarette consumption patterns between less and more well-off households. These results hold even considering some small substitution through the use of bidis, which are largely consumed by the poor. The short-term consumption impacts are also negligible compared with the estimated gains because of savings in medical costs and the greater number of productive years of life. 2018-09-13T21:31:05Z 2018-09-13T21:31:05Z 2018-09 Working Paper http://documents.worldbank.org/curated/en/688821536776691954/The-Distributional-Impacts-of-Cigarette-Taxation-in-Bangladesh http://hdl.handle.net/10986/30424 English Policy Research Working Paper;No. 8580 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper South Asia Bangladesh
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	INEQUALITY INCOME DISTRIBUTION TOBACCO TAX TOBACCO PRICE TAXATION
spellingShingle	INEQUALITY INCOME DISTRIBUTION TOBACCO TAX TOBACCO PRICE TAXATION Del Carmen, Giselle Fuchs, Alan Genoni, Maria Eugenia The Distributional Impacts of Cigarette Taxation in Bangladesh
geographic_facet	South Asia Bangladesh
relation	Policy Research Working Paper;No. 8580
description	Despite the obvious positive health impacts of tobacco taxation, an argument raised against it is that poor households bear the burden of the increased prices because of their higher share of spending on tobacco. This note includes estimates of the distributional impacts of price rises on cigarettes under various scenarios using the Household Income and Expenditure Survey 2016/17. One contribution of this analysis is to quantify the impacts by allowing price elasticities to vary across consumption deciles. This shows that an increase in the price of cigarettes in Bangladesh has small consumption impacts and does not significantly change the poverty rate or consumption inequality. These findings stem from relatively even cigarette consumption patterns between less and more well-off households. These results hold even considering some small substitution through the use of bidis, which are largely consumed by the poor. The short-term consumption impacts are also negligible compared with the estimated gains because of savings in medical costs and the greater number of productive years of life.
format	Working Paper
author	Del Carmen, Giselle Fuchs, Alan Genoni, Maria Eugenia
author_facet	Del Carmen, Giselle Fuchs, Alan Genoni, Maria Eugenia
author_sort	Del Carmen, Giselle
title	The Distributional Impacts of Cigarette Taxation in Bangladesh
title_short	The Distributional Impacts of Cigarette Taxation in Bangladesh
title_full	The Distributional Impacts of Cigarette Taxation in Bangladesh
title_fullStr	The Distributional Impacts of Cigarette Taxation in Bangladesh
title_full_unstemmed	The Distributional Impacts of Cigarette Taxation in Bangladesh
title_sort	distributional impacts of cigarette taxation in bangladesh
publisher	World Bank, Washington, DC
publishDate	2018
url	http://documents.worldbank.org/curated/en/688821536776691954/The-Distributional-Impacts-of-Cigarette-Taxation-in-Bangladesh http://hdl.handle.net/10986/30424
_version_	1764471967082086400

The Distributional Impacts of Cigarette Taxation in Bangladesh

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