Time to Quit The Tobacco Tax Increase and Household Welfare in Bosnia and Herzegovina

This paper uses an extended cost-benefit analysis to estimate the distributional effect of tobacco tax increases in Bosnia and Herzegovina. The analysis considers the effect on household income of an increase in tobacco prices, changes in medical expenses, and the prolongation of working years under...

Full description

Bibliographic Details
Main Author: Fuchs, Alan
Format: eBook
Language:English
Published: Washington, D.C The World Bank 2019
Series:World Bank E-Library Archive
Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
LEADER 02153nmm a2200217 u 4500
001 EB002106954
003 EBX01000000000000001247044
005 00000000000000.0
007 cr|||||||||||||||||||||
008 221013 ||| eng
100 1 |a Fuchs, Alan 
245 0 0 |a Time to Quit  |h Elektronische Ressource  |b The Tobacco Tax Increase and Household Welfare in Bosnia and Herzegovina  |c Alan Fuchs 
260 |a Washington, D.C  |b The World Bank  |c 2019 
700 1 |a Fuchs, Alan 
041 0 7 |a eng  |2 ISO 639-2 
989 |b WOBA  |a World Bank E-Library Archive 
490 0 |a World Bank E-Library Archive 
028 5 0 |a 10.1596/31249 
856 4 0 |u http://elibrary.worldbank.org/doi/book/10.1596/31249  |x Verlag  |3 Volltext 
082 0 |a 330 
520 |a This paper uses an extended cost-benefit analysis to estimate the distributional effect of tobacco tax increases in Bosnia and Herzegovina. The analysis considers the effect on household income of an increase in tobacco prices, changes in medical expenses, and the prolongation of working years under various scenarios, based on data in three waves of the national Household Budget Survey. One critical contribution is a quantification of the impacts by allowing price elasticities to vary across consumption deciles. The results indicate that a rise in tobacco prices generates positive income variations across the lowest income groups in the population (the bottom 20 percent). At the same time, tobacco price increases have negative income effects among middle-income and upper-income groups. These effects are larger, the higher the income level. If benefits through lower medical expenses and an expansion in working years are considered, the positive effect is acerbated among the lowest income groups. The middle of the distribution sees the income effect turn from negative to positive, and the top 40 percent, although continuing to experience a negative effect, see the magnitude of this effect diminish. Altogether, these effects mean that increases in tobacco prices have a pro-poor, progressive effect in Bosnia and Herzegovina. These results also hold within entities and across urban and rural areas