December 18, 2018
Southeastern European Think Tanks Present Research at Regional Conference
Culminating a year-long investigation of tobacco taxation and its impact on consumer behaviors in the SEE region, Tobacconomics think tank partners in the region from Albania, Bosnia & Herzegovina, Croatia, Kosovo, Macedonia, Montenegro and Serbia met in Belgrade with policy makers and public health advocates from the region to present their breakthrough findings and recommendations.
Although the prevalence of tobacco consumption (mainly cigarette smoking) has declined within the last few years in most of the countries, the rate is still higher-than-average, and has actually increased among young people. Additionally, all countries fall below the 70% excise rate on cigarettes as recommended by the WHO. The research from the region examined data at the micro- and macro-economic levels to estimate the elasticity of demand for tobacco products, that is, consumer behavioral responses to changes in price of tobacco products. Moreover, the groups simulated these changes in price to estimate the impact on government revenues from tobacco tax increases. The results follow most research in low- and middle-income countries—an increase in excise tax reduced the quantity demanded for tobacco products and increased governmental revenues.
The findings from these studies are monumental and contribute significantly to the in-country evidence base for more effective tobacco tax reforms. Tobacconomics Director, Frank Chaloupka, noted in his comments to the conference the cost from tobacco use include “not just medical care for users (5-7% of healthcare spending is used to treat tobacco-related illnesses), but also other external costs, including loss of productivity at $1.4 trillion per year, and almost 2% of global GDP.” Ana Mugosa, lead researcher from consortium member, ISEA, Montenegro observed the importance of the research in advancing tax policy reforms, particularly to address the recent 5 percent increase in smoking prevalence and alarmingly high rate of smoking prevalence among the youth of the country, where 1 in 3 students smoke: “We always had speculations, now we have scientific support.”
Tobacconomics will continue to work with the SEE Research Consortium, a network coordinated by the Institute for Economic Sciences, in Belgrade, Serbia to produce high-quality research to inform more effective tobacco taxation policy. We are delighted to share their most recent findings, synthesized into a series of policy briefs from each country: Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro, and Serbia. Corresponding reports for each brief will be forthcoming.