Affordability of cigarettes in ten Southeastern European countries between 2008 and 2019

Zubović, Jovan and Zdravković, Aleksandar and Jovanović, Olivera and Đukić, Mihajlo and Vladisavljević, Marko (2023) Affordability of cigarettes in ten Southeastern European countries between 2008 and 2019. Tobacco control. ISSN 0964-4563

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Abstract

Background The empirical evidence shows that
tobacco consumption is strongly associated with its
affordability. The nominal growth in tobacco prices
imposed by taxation should exceed or at least keep
pace with nominal income growth, ensuring that
tobacco products become less affordable over time. No
analysis covering affordability issues in the Southeastern
European (SEE) region has been conducted prior to this
research.
Objectives The study aims to examine trends in
cigarette affordability in ten selected SEE countries over
the period 2008–2019 and the impact of affordability on
the consumption of cigarettes. On the policy side, it aims
to support conducting of more effective evidence-based
policy of tobacco taxation.
Methods The relative income price of cigarettes and
the tobacco affordability index are used as affordability
measures. The panel regression was run to estimate the
impact of affordability measures and other covariates on
cigarette consumption.
Results The affordability of cigarettes in the selected
SEE countries has decreased on average but showed
different patterns over the observed period. A decline in
affordability has been more dynamic in Western Balkan
(non-EU members) countries and low-and-middle-income
countries within the SEE region. Econometric estimation
confirms affordability as the main determinant of tobacco
consumption, indicating that a decline in affordability
considerably reduces tobacco consumption.
Conclusions Despite the evidence, affordability is still
widely ignored by SEE policymakers when designing
national tobacco taxation policies. Policymakers should
be aware of the risk that future increases in cigarette
prices could lag behind real income growth, making tax
policy less effective at reducing consumption. Reducing
affordability should be the paramount consideration in
designing effective tobacco taxation policies.

Item Type:	Article
Additional Information:	COBISS.ID=114826505
Research Department:	Welfare Economics
Depositing User:	Jelena Banovic
Date Deposited:	25 Apr 2023 13:18
Last Modified:	25 Apr 2023 13:18
URI:	http://35.240.28.64/id/eprint/1902
Author Links:	[error in script] No links available.

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