[Tobacco taxes, prices and demand for tobacco products: a comparative analysis]

Measuring anomalies in cigarette sales using official data from Spanish provinces: Are the anomalies detected by the Empty Pack Surveys (EPSs) used by Transnational Tobacco Companies (TTCs) the only anomalies?

INTRODUCTION

There is a literature that questions the veracity of the studies commissioned by transnational tobacco companies (TTCs) to measure the illicit tobacco trade. Furthermore, there are studies that have indicated that the empty pack surveys (EPSs) ordered by TTCs overestimate the size of this trade. This study simultaneously analyzed whether the EPSs established in each of the 47 Spanish provinces were accurate and measured anomalies observed in provinces where sales exceed expected values.

METHODS

To achieve the objectives of this study, provincial data on cigarette sales, prices and GDP per capita were used. These data were modeled with machine learning techniques that are widely used to detect anomalies in other areas.

RESULTS

The magnitude of the average anomaly in provinces where sales are higher than their expected values exceeds 40%, while the average anomaly in provinces where sales are lower than their expected values (as detected by the EPSs) is <15%. Furthermore, the results reveal that there is a clear geographical pattern to the provinces in which sales below reasonable values are observed. In addition, the values provided by the EPSs in Spain, as indicated in the previous literature, are slightly overestimated. Finally, some regions bordering other countries or that are highly influenced by tourism have observed sales that are higher than their expected values.

CONCLUSIONS

Cooperation between countries in their tobacco control policies can have better effects than policies developed based on information from a single country. The lack of control over the transactions of tourists and the inhabitants of bordering countries can cause important anomalies that distort the understanding of tobacco consumption that governments have based on official data.

Price and income elasticities of demand for cigarette consumption: what is the association of price and economic activity with cigarette consumption in Spain from 1957 to 2016?

OBJECTIVES

Extensive empirical and theoretical studies have been devoted to analyzing the relationship between tobacco and income. The price and income elasticities of demand for cigarette consumption are the main focus of studies in this body of literature. However, few empirical studies exist that analyze how economic growth affects the cigarette market, and no one has studied the effects of economic expansions and recessions. Spain, as in the other countries of the European Union, has suffered a strong recession since 2008. Therefore, this article aims to detect if income elasticity takes different values in economic growth and recession and, in addition, to check whether price elasticity in Spain is consistent with previous studies.

STUDY DESIGN

This is an observational epidemiological study.

METHODS

In this article, the price and income elasticities of demand for cigarette consumption are measured for the Spanish cigarette market using time series data from 1957 to 2016 and by applying a non-linear autoregressive dynamics lag model. The novel specification proposed in this study is the determination of the possible effects of asymmetries in the economic shocks on cigarette consumption.

RESULTS

Our results reveal that cigarette consumption maintains a notable asymmetric relationship. In particular, our results show that in expansion shocks, cigarette consumption increases (a 10% economic growth is associated with a 4.05% increase in cigarette consumption), whereas in recession shocks, cigarette consumption decreases dramatically, with a more pronounced pattern in recession phases than in expansion phases (a 10% economic decline is associated with a 58.16% decrease in cigarette consumption). On the other hand, price elasticity maintains the same behavior shown in the previous literature (a 10% price increase is associated with a 2% decrease in cigarette consumption).

CONCLUSIONS

Higher cigarette prices are associated with decreased smoking. In addition, the economic recession helps in decreasing cigarette consumption. Therefore, it is strongly recommended that tax authorities have our results in mind before establishing health policies. If the authorities do not, it is possible that they will not obtain the expected results in terms of decreased tobacco consumption.

[Self-regulation systems to control tobacco advertising. An empirical analysis]

OBJECTIVE

Against the background of the debate aroused by the tobacco advertising ban as a result of Directive 98/43/EC and of the Proposed Directive of 5/9/2001, we aimed to evaluate how self-regulation of tobacco advertising systems has worked in the last 5 years and to evaluate its effectiveness and relevance as a potential tool in public health prevention.

METHODS

We performed a content and discourse analysis of all advertisements appearing in the Sunday supplements of the three weekly newspapers with the widest circulation in Spain (El Pais, El Mundo, and ABC) between January 1995 and January 2000 to detect infractions of the norms of the self-regulation code of the Spanish Tobacco Association (Asociacion Espanola de Tabaco [AET]) regarding: a) the identity of models used in advertising; b) direct or indirect claims for the therapeutic properties of smoking; c) depiction of cigarettes in advertisements, and d) printed warnings on advertisements.

RESULTS

We examined 910 banners and 369 advertisements. Very few advertisements displayed rational arguments on elements such as price (13%) or product components (7%). Although the AET's code was generally respected, the advertisements displayed a series of subtleties that allowed the industry to get around the code: 10 of the 369 advertisements reviewed depicted famous people (mainly pilots and artists) and one third of them used iconic personages (Joe Camel or Marlboro Man); one advertisement suggested the therapeutic properties of tobacco and almost all linked smoking with social success and leisure. Although cigarettes were not depicted, 18% of the advertisements showed substitutes for cigarettes in various places (12%) and a large percentage infringed the code's recommendations on printed warnings.

CONCLUSIONS

The industry's use of creative subtleties infringing its self-imposed norms begs the question of how far self-regulation is viable when a failure in the system can have serious consequences for public health.

[Use of a retail sales tax on tobacco to fund drug therapy for smoking cessation]

OBJECTIVES

To analyze the revenue-generating potential of a new retail sales tax on tobacco and its effects on public health if the tax revenues were allocated to finance smoking cessation programs.

METHODS

We provide an extensive review of the legislation on the authority of autonomous communities to order the levy and collection of special taxes and describe the new tobacco retail sales tax. We calculated collected tax revenues with a simulation model of indirect taxation -the SINDIEF (Simulador de Imposición Indirecta del Instituto de Estudios Fiscales) model- and determined the potential number of smokers who would quit smoking. Epidemiological and clinical variables from existing pharmacological therapies were used to obtain the results.

RESULTS

For the highest tax rate (20 eurocents per pack), we found that 1,078,000 smokers yearly would give up smoking, suggesting that the new tax could be considered as a way to promote pharmacotherapy in smoking behavior.

CONCLUSIONS

Fiscal corresponsability to finance smoking cessation programs could be based on a tobacco retailing sales tax, similar to that levied on hydrocarbons. Simulations for different tax rates show the huge potential of the tax to yield revenues, as the tax is levied yearly on 4.6 billion cigarette packs each year.

Price and consumption of tobacco in Spain over the period 1965–2000

Changes in cigarette price have had an appreciable impact on smoking prevalence in several countries. We analysed the price elasticity of demand for cigarettes (effect of price of cigarettes on tobacco consumption) between 1965 and 2000 in Spain. For total consumption of cigarettes, a 1% increase in price is associated with a 0.19% decrease of consumption (price elasticity of -0.19; P<0.01). The real price of blond cigarettes was significantly and inversely associated with blond cigarette consumption: on average, smoking prevalence decreased 1.25% for a 1% increase in the real price of cigarettes (significant price elasticity of -1.25). For black cigarettes we found a lower but still high and significant elasticity of -0.61. There is an inverse relation between price and consumption of cigarettes in Spain, indicating that interventions at the economic level (such as real increases in prices) may have an important public health impact in tobacco control.

Price and consumption of tobacco in Italy over the last three decades

Changes in cigarette price have had an appreciable impact on smoking consumption in several countries. We analysed the price elasticity of demand for cigarettes in Italy over the period 1970-2001. A 1% increase in price of cigarettes led to a 0.30% decline in smoking prevalence and to a 0.43% decline in cigarette consumption. The present analyses confirm the existence of an inverse association between price and prevalence/consumption of cigarettes in Italy, and indicate that economic aspects may have important public health implications in tobacco control.