Are Cigarette Taxes Effective Against Smoking?

This study, which was conducted in Canada, examined whether raising tax is an effective way of deterring people from smoking. Researchers used data from the “Canadian National Population Health Survey,” which collects various health related information from a substantial segment of the population every two years. They correlated the data on the prevalence of cigarette smoking with tax rise on cigarettes. It was found that there is a significant fall in the number of people who smoke during the period of higher taxes. Furthermore, it was observed that the middle aged group was highly unresponsive to the rise in cigarette tax.

Presently, the use of tobacco is responsible of 5 million deaths every year, worldwide. Imposing higher taxes is one way of reducing the pervasiveness of smoking in the community. By doing this, governments save substantially on costs related to the management of public health. Until now, it was believed that an increase in tax would reduce the smoking habit among young adults, as they have lower disposable incomes. But studies have shown that young people are unresponsive to a tax hike. Most of the studies in this regard were conducted in the US. In the US, the states which produce tobacco impose a lower tax. Researchers wanted to assess the impact of a tax rise in Canada, where tobacco production is the lowest.

* Data regarding the health of about 17,000 people was collected from the “Canadian National Population Health Survey”. The data included age, gender, income, education, family size and smoking habits. This survey was conducted every two years from 1994 to 2009. Data of people aged between 12 and 65 was considered for analysis.
* Information on tax on cigarettes was collected for the same duration of time. This included taxes imposed at the provincial and federal levels.
* Variation in smoking participation upon changes in taxes was noted. In addition, sensitivity to tax hike of various groups based on age, sex, education and income was also noted.

* The overall percentage of people who smoke has gradually decreased in Canada in the past two decades. The tax was reduced by 50 percent in 1994 to curtail the smuggling of cigarettes. From 2000 to 2002, increase in the total tax on cigarettes was the highest. The fall in the percentage of people who smoked was also the highest during that time.
* Overall, with every 10 percent rise in tax, there was a fall of 2.3 percent in the number of people who smoked. People aged between 25 and 44 were the most unresponsive to a rise in tax.
* The low income group was more responsive to tax rise than was the high income group.
* The percentage of smokers was found to be lower among females, older individuals, married individuals, the high income group and those with higher education.

Shortcomings/Next steps
According to some researchers, measuring the total of number of cigarettes and the amount of cotinine intake is a more effective way of assessing the intensity of smoking. But as the cotinine levels in blood were not measured during the “Canadian National Population Health Survey”, this data was not available to the researchers of the present study.

Smoking is known to cause various types of cancers, cardiovascular diseases, and chronic pulmonary disorders. In fact, because of smoking, there is a fall of about six to 10 years in the total life-span of a person. Smoking is expected to cause 8 million deaths every year, by 2030. This study has shown that imposing higher taxes could be one of the ways of reducing the prevalence of smoking in the community. However, this study has also shown that people aged between 25 and 44 years, or have a high income, are unresponsive to this measure. Hence, in order to reduce the prevalence of smoking, there is a need to devise additional strategies that take the socio-demographic characteristics of the population into consideration.

For More Information:
Cigarette Taxes and Smoking Participation: Evidence from Recent Tax Increases in Canada
Publication Journal: International Journal of Environmental Research and Public Health, 2011
By Sunday Azagba; Mesbah Sharaf; Concordia University, Quebec, Canada

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