UWCScholar :: Browsing by Author "Black, Philip A"

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Tobacco taxes and tobacco consumption in South Africa: an optimal mix?
(University of the Western Cape, 2003) Mohamed, Ahmed Idiris; Black, Philip A
The mini-thesis challenges the applicability of the research undertaken thus far on the most efficient public policy measures to reduce the consumption of cigarettes in developing countries. Drawing from economic theory, it questions the findings and hypothesizes that an increase in excise taxes on cigarettes will have unanticipated effects on the addicted poor and middle-income smokers in developing countries. One of these effects may be an intra-household re-allocation of the family budget to sustain the addictive behaviour. Moreover, there could be substitution between tobacco products ( often of cheaper and lower quality), which implicitly could lead to higher health expenditure in the long run and may also imply a substantial loss of government revenue. The traditional literature that the mini-thesis seeks to challenge, generally agrees that an increase in excise taxes on cigarettes will result in a decrease in consumption . The literature further claims that consumers from low and middle -income social groups and countries are more responsive to cigarette price increases (i .e. have a relatively more price elastic demand), which this mini-thesis disputes.