The effect of cigarette price increases on cigarette consumption, tax revenue, and smoking-related death in Africa from 1999 to 2013

Listed in:

• ... on public health
• ... on tax revenue
• Impact of tobacco taxation

Abstract

Objectives This study investigates the effects of price hikes on cigarette consumption, tobacco tax revenues, and reduction in smoking-caused mortality in 36 African countries. Methods Using panel data from the 1999-2013 Euromonitor International, the World Bank and the World Health Organization, we applied fixed-effects and random-effects regression models of panel data to estimate the elasticity of cigarette prices and simulate the effect of price fluctuations. Results Cigarette price elasticity was the highest for low-income countries and considerably lower for other African economies. The administered simulation shows that with an average annual cigarette price increase of 7.38%, the average annual cigarette consumption would decrease by 3.84%, and the average annual tobacco tax revenue would increase by 19.39%. By 2050, the number of averted smoking-attributable deaths (SADs) will be the highest in South Africa, followed by the Democratic Republic of Congo, Madagascar, and Ethiopia. Conclusions Excise tax increases have a significant effect on the reduction of smoking prevalence and the number of averted smoking-attributable deaths, Low-income countries are most affected by high taxation policies.