Abstract
Governments have long taxed cigarettes and other tobacco products. Tobacco taxes have been thought to satisfy the Ramsey Rule that states that consumption taxes should be applied to goods with relatively inelastic demands so that welfare losses associated with taxation will be minimized. More recently, many countries have increased tobacco taxes to reduce tobacco use. These tax increases are partly based on efficiency grounds — the idea that tobacco users should bear the full costs of their consumption — and assume that there are social costs associated with use; thus, the tax is a “users’ fee.” Related to this is the use of tobacco taxes as a public health policy. The effectiveness of taxes for each these purposes depends on information concerning the impact of tobacco taxes on tobacco use. This chapter reviews this evidence.
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Chaloupka, F.J. (1999). How Effective are Taxes in Reducing Tobacco Consumption?. In: Jeanrenaud, C., Soguel, N. (eds) Valuing the Cost of Smoking. Studies in Risk and Uncertainty, vol 13. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-4415-5_15
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DOI: https://doi.org/10.1007/978-94-011-4415-5_15
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