Economic gains and health benefits from a new cigarette tax scheme in Taiwan: a simulation using the CGE model
2006
Economic Gains and Health Benefits from a New Cigarette Tax Scheme in Taiwan
publication
Evidence: moderate
Author Information
Author(s): Ye Chun-Yuan, Lee Jie-Min, Chen Sheng-Hong
Primary Institution: Overseas Chinese Institute of Technology
Hypothesis
What are the economic and health impacts of increasing cigarette taxes in Taiwan?
Conclusion
The increased cigarette excise tax will benefit both public health and the economy.
Supporting Evidence
- The new tax scheme is expected to save between 28,125 and 56,250 lives.
- Health insurance savings from reduced smoking-related illnesses could reach NT$1.222 to NT$2.445 billion annually.
- Cigarette consumption in Taiwan dropped by almost 25% after the tax increase.
Takeaway
Raising cigarette taxes can help people smoke less and save lives, while also saving money on health costs.
Methodology
The study used a computable general equilibrium (CGE) model to simulate the impact of reduced cigarette consumption due to the new tax scheme.
Limitations
The model does not account for finite resources in the economy and lacks explicit budgetary constraints for households.
Digital Object Identifier (DOI)
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