I’m actually working on a paper about this with a few cardiologists. There have been a handful of papers looking at this over time, with variable conclusions, depending in part on the data source(s) used, which country you’re looking at, and how some parameters are defined. Our data suggest that an increase of $0.25 per-pack in cigarette taxes (in the United States) is associated with an estimated reduction of 0.6% in the population smoking prevalence (that’s an absolute reduction, not a relative reduction; i.e. would move the population smoking prevalence in a given state from 18.5% to 17.9% or thereabouts). This is longitudinal data collected over 15 years, not a one-shot cross-sectional analysis, either.
Take that for what it’s worth. Just letting you know that I believe that this evidence does exist. Whether you consider this a good idea is another question.
Do you say this with any type of before/after stats from a sin tax implementation showing no meaningful change? Literally any stats?
Except you only have one side of the equation? Also, how is seeing people still smoking proof that the sin tax has little to no effect on demand?
I stated the sin taxes do an “amazing” job of pricing a certain segment of the pop out of the market. Which it does. In a very absolute sense. If expendable income stays constant, you CANNOT increase prices without lowering consumption.
I can’t spill too much of this because we’re currently writing this with intent to publish it (not that I expect our rival researchers are trolling T-Nation looking for ideas, lol) but we do have an interesting income-related twist. It actually appears that low-income earners are the least responsive to tax increases (although I have to admit that we’re looking at “prevalence” only in our analysis - yes/no - rather than total consumption) whereas middle- and higher-income earners seem to be.more sensitive to increases.
Understandable and I appreciate the feed back. That was my hypothesis, that lower income earners are less responsive. If you happen to remember this conversation once you publish I’d love to know if I’m right ( You can forget about it if I’m wrong lol )
As with anything in economics, it’s about proportionality and when compared to what? It’s a fact people die of all ages - is there any meaningful difference between kids dying from drug ods compared with something most people deem innocuous or acceptable (like dirt bike accidents or something like that) proportionally? Appeal to emotion should be as disregarded in terms of policy development as black market effects.
Well really it’s not evidence of anything but a response to your use of you anecdote involving your uncle - it proves, in the grand scheme of things, nothing other than your uncle isn’t priced out of consuming, but may consume less (again, we don’t know anything aside from he doesn’t like paying more for smokes) and that some bums I’ve noticed smoke butts. That’s about it.
The existence of the sin tax wrt to smoking consumers will help prove nothing when we don’t consider other effects like nominal income, real income wrt proportion spent on smoking, and other lifestyle choices and habits as well as environmental factors, just to name a few things off the top of my head. Other than that, trading anecdotes is just us trading stories, really.
Because Big Pharma has failed to keep medicinal marijuana from coming to the market-due to public pressure-doesn’t mean they aren’t against it. They may be trying to enter the market with their synthetic version of the plant. But this is because they’ve seen their profits diminish because of it’s legalization. Profits are their number 1 goal at any expense. If the environment or humans have to suffer, so be it. They want to make more money. Health is a distant 2nd.
I don’t doubt that an effect like exists; robust studies can eek out affects in meaningful ways - do you know if it’s affect on different income/lifestyle buckets? I have assumptions but if you’re looking at the data, I’d be interested in having my assumptions shattered lol
I’m referencing the inevitable increase in children of the state you see when you allow their parents easier access to kill themselves.
Not to split hairs, but trading anecdotes proves my side that consumption has decreased as a result of the sin tax. The only argument that remains is how much?
Amazing compared to what? I think, like you alluded to, it depends on who you’re examining … it might have a stronger effect on certain groups with specific characteristics and I’d be interested on who those groups are and their overall behavior patters and how we can get em hooked again damnit
Well, splitting hairs I never refuted that it didn’t. I just don’t think it’s as effective as I think you’ve been assuming is what I have been talking about
Has there been an increase in events vs an increase in focus on these events? I.e. availability bias? Serious question, I don’t know the answer…
No, and I think finding them will be difficult (which is why I haven’t looked) because of the Truth campaign and cultural shift towards cigarettes.
But, I’m not the one that stated sin taxes do an awesome job of pricing certain segments of the pop out of the market. You did. The burden of proof is on you, my friend.
Do you have proof that demand has dropped because of the added sin tax?
Proof?
Except cigarette consumption doesn’t occur in a vacuum. People might choose to buy less of X to maintain their consumption of Y. Addictive substances are less elastic than most goods.
@polo77j That was @pfury quote. I’m not sure why it has my name…
Once the paper is out, I’ll try to remember to f/u with you guys. We are still parsing out a few of the subgroup effects, but it seems that there are some interesting groups which are more/less responsive to tax increases, yes…
Speaking in generalities, I think there are a few things we can all agree on:
in the macro sense, yes, a “sin tax” on something like tobacco likely does have a modest effect on the prevalence of smoking in the population
the effect is not as large as we might like (i.e. an increase of $0,25 per pack translating to a 0.6% drop in smoking is not that large)
however, when you apply that 0.6% to a population as large as the United States, that translates to literally millions of people smoking less / not smoking, and tens of thousands of cases of cancer, heart disease, and other sequelae prevented or delayed
the effect does vary across different populations and subgroups. Some people will be more sensitive to the price increase; others will continue to smoke no matter what (albeit likely with reduced consumption)
as noted above, cumulative healthcare costs of any one thing are very difficult to pin down precisely, because early deaths can mean fewer people requiring old-age, end-of-life care (not that I think this is a good thing, merely acknowledging the reality)
From there, how you feel about the idea of cigarette taxes depends on how much you weigh the positives versus the negatives of the above.
Yes, at scale that is a substantial amount of individuals. The question I have is do they shift their behavior/time/resources towards a healthy/productive or unhealthy/destructive alternative? They don’t quit in a bubble and sit around twiddling their thumbs - I know some people start to over eat or develop some other bad habit, while some people take up a more healthy habit (working out, running, w/e) … I wonder what the proportion is and if there’s any variation wrt method used to quit smoking…
NY minimum cost per pack of cigs - $10.50
OH minimum cost per pack of cigs - ~4.50 (this is a guesstimate off asking a nearby coworker what she pays).
Add in the fact that he openly bitches about how he can’t afford as many cigs, and very few times in my life have I been MORE sure about a stance re: my uncle smokes less due to sin tax.
Math does not prove it, lol. Life isn’t an equation. Economics is a social science after all.
You’re acting like people use their expendable income on cigarettes and cigarettes only. That is not the case of course. No one pulls out their graph paper and goes, “well, shit, the state is upping the tax on cigarettes, better adjust my demand curve and buy less.” I mean, come on…
I seriously doubt, particularly for lower-income earns, that people consume fewer cigarettes because of higher “sin” taxes. Yes, people would have to consume less of something or find cheaper alternatives of something to consume the same number of cigarettes and my guess is that is what happens.
Ya, this is why I said you seem to be looking at this in the micro sense.
Your N=1 uncle isn’t proof. It’s one anecdote and I have this feeling he didn’t tell you he is buying fewer cigarettes because of the higher sin tax in NY.
I never said cigarettes are perfectly inelastic. Few things are. My point has been there is no evidence a “sin” tax reduces consumption in a meaningful way in the macro sense. So far, I’ve gotten 1 example…
Your uncle got hit with a 3.125% increase in state sales tax, but that’s got nothing to do with it? Or the fact that his cost of living skyrocketed…
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