Impact of Tobacco Tax Increases in Serbia
Author Information
Author(s): Jovan Zubović, Olivera Jovanović, Boban Nedeljković
Primary Institution: Institute of Economic Sciences, Belgrade, Serbia
Hypothesis
How do tobacco tax increases affect household budgets in Serbia, particularly for different income groups?
Conclusion
Increasing tobacco taxes would lead to a more equitable income distribution, benefiting low-income households the most.
Supporting Evidence
- A 43.6% tax increase could lead to a 22.4% rise in retail tobacco prices.
- Low-income households could see a net gain of 2.9% in disposable income.
- Medical costs related to smoking could decrease with higher tobacco taxes.
- Tax increases have shown progressive effects in other countries, benefiting lower-income groups.
Takeaway
If Serbia raises tobacco taxes, it could help poor families save money and improve their health by reducing smoking.
Methodology
The study used a modified Extended Cost–Benefit Analysis framework to assess the effects of a 43.6% tobacco tax increase on household budgets.
Limitations
The analysis focused only on manufactured cigarettes, which may not capture the full impact of tobacco consumption changes.
Participant Demographics
The study considered low-, middle-, and high-income households in Serbia.
Digital Object Identifier (DOI)
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