Smoking taxes
As you will have heard, excises on smoking are going up. This will raise money (to the extent that smokers don’t quit) and reduce smoking (to the extent that they do quit). If you’re interested in the modelling used to estimate the impact on these conflicting goals, the Treasury’s Regulatory Impact Statement is a well-written and detailed explanation.
It’s also interesting to note that Treasury agrees the excise costs are already probably higher than the costs to other people imposed by smoking, and since the smoking excise is probably a regressive tax, the only convincing motivation for smoking excise taxes is to stop people smoking and so improve population health in the long term.
In this light it’s interesting that the Herald’s bogus poll for today is on whether increasing costs will lead to fewer smokers: at the moment, only 11% of responders think it will. Fortunately, there is strong evidence that the poll respondents are wrong.
Thomas Lumley (@tslumley) is Professor of Biostatistics at the University of Auckland. His research interests include semiparametric models, survey sampling, statistical computing, foundations of statistics, and whatever methodological problems his medical collaborators come up with. He also blogs at Biased and Inefficient See all posts by Thomas Lumley »
The RIS is very good. The only thing that it missed was the effects by decile. Treasury wouldn’t have had time to do that modelling, but Des O’Dea and George Thomson did it a while back in their cost report. The exact numbers are now out of date as smoking rates have fallen a bit since 2005 and excise has gone up considerably. But as of 2005, here were their numbers: a 50% increase in tobacco prices [roughly where we’ll have gotten to after the three 10% hikes and the hikes since 2005] would see 36,990 non-quitting Decile 1 households each spend an extra $928 per year while an estimated 4,110 quitting Decile 1 households would save $2,981; the poorest cohort then winds up spending a net extra $22 million in tobacco excise while decile 10 households spend a net extra $31 million.
13 years ago