Economic research in waterpipe tobacco smoking: reflections on data, demand, taxes, equity and health modelling.

Economic evaluation of tobacco control policies is common in high-income settings and mainly focuses on cigarette smoking. Evidence suggests that increasing the excise tax of tobacco products is a consistently effective tool for reducing tobacco use and is an efficient mechanism for increasing government revenues. However, less research has been conducted in low/middle-income countries where other tobacco forms are common. This paper presents insights from our work on the economics of waterpipe tobacco smoking conducted in the Eastern Mediterranean Region where waterpipe smoking originated and is highly prevalent. The specific areas related to economics of waterpipe smoking considered herein are: price elasticity, taxation, government revenue, expenditure and healthcare costs. This paper aims to provide practical guidance for researchers investigating the economics of waterpipe tobacco with potential implications for other novel tobacco products. We present lessons learnt across five thematic areas: data, demand, taxes, equity and health modelling. We also highlight knowledge gaps to be addressed in future research. Research implications include designing comprehensive assessment tools that investigate heterogeneity in waterpipe smoking patterns; accounting for cross-price elasticity of demand with other tobacco products; exploring the change in waterpipe tobacco smoking in response to a tax increase and analysing the equity impact of waterpipe tobacco control interventions.

Impact of waterpipe tobacco taxation on consumption, government revenue and premature deaths averted in Jordan, Lebanon and Palestine: a simulation study.

INTRODUCTION: Despite the high prevalence of waterpipe tobacco smoking in the Eastern Mediterranean region, evidence supporting its fiscal measures is limited. We modelled the impact of waterpipe tobacco-specific excise taxes on consumption, government revenue and premature deaths averted in Jordan, Lebanon and Palestine. METHODS: We developed a simulation model using country-specific and market share-specific price, consumption and price elasticity data from WHO, UN Comtrade and nationally representative surveys. We modelled increases to specific excise taxes to meet a 35.9% tax burden on 20 g of waterpipe tobacco in Lebanon and Jordan, in line with the global average, and to double government revenues from excise duties in Palestine, which has surpassed this average. RESULTS: Specific excise tax was raised by $1.14 ($0.18-$1.32) in Jordan, $2.41 ($0.03-$2.44) in Lebanon (alongside removal of ad valorem taxes) and $2.39 ($1.72-$4.11) in Palestine per 20 g of waterpipe tobacco. Government revenue increased by $126.3 million in Jordan, $53.8 million in Lebanon and $162.4 million in Palestine while waterpipes smoked decreased by 32.4% in Jordan, 71.0% in Lebanon and 16.3% in Palestine. The corresponding numbers of premature deaths averted annually were approximately 162 000; 1 000 000; and 52 000. DISCUSSION: Increases in waterpipe tobacco-specific excise taxes substantially reduce smoking and increase government revenue and averted premature deaths in Jordan, Lebanon and Palestine. This has positive implications for both public health and financing and should be considered a policy priority.

Gender differences in the price elasticity of demand for waterpipe and cigarette smoking in Lebanon, Jordan and Palestine: a volumetric choice experiment.

OBJECTIVES: This study assessed the extent to which the elasticity of cigarette and waterpipe tobacco products differs between men and women. We also explored the levels of substitution and complementarity in tobacco products among men and women. SETTING: The study examines tobacco elasticities in three Arab countries: Lebanon, Jordan and the West Bank of Palestine. PARTICIPANTS: We used data from nationally representative surveys of adults aged ≥18 years in Lebanon (n=1680), Jordan (n=1925) and Palestine (n=1679). The proportion of women was 50.0% of the sample in Lebanon and Palestine, and 44.6% in Jordan. PRIMARY AND SECONDARY OUTCOME MEASURES: A zero-inflated Poisson regression model estimated own-price and cross-price elasticities for two variations of cigarettes and five variations of waterpipe tobacco products. Elasticities were measured based on eight scenarios of prices. RESULTS: Demand for waterpipe tobacco products was elastic for both men and women. The cross-price elasticities in the three countries indicate the existence of substitution between cigarettes and waterpipe products and by different varieties within each of the two tobacco products. Gender differences varied across the three countries whereby higher cross-price elasticities were observed for women in Jordan and Palestine. For example, the price elasticity for discount waterpipe was -1.4 and -0.6 for women and men in Jordan, respectively. CONCLUSIONS: Results on the elasticity of demand for tobacco products and the existence of substitution between tobacco products reveal the higher responsiveness of men and women to changes in tobacco prices. This should be taken into consideration in tobacco control strategies particularly when reducing tobacco consumption via taxation policies.

Who bears the burden of universal health coverage? An assessment of alternative financing policies using an overlapping-generations general equilibrium model.

In their quest for universal health coverage (UHC), many developing countries use alternative financing strategies including general revenues to expand health coverage to the whole population. Unless a policy adjustment is undertaken, future generations may foot the bill of the UHC. This raises the important policy questions of who bears the burden of UHC and whether the UHC-fiscal stance is sustainable in the long term. These two questions are addressed using an overlapping generations model within a general equilibrium (OLG-CGE) framework applied to Palestine. We assess and compare alternative ways of financing the UHC-ridden deficit (viz. deferred-debt, current and phased-manner finance) and their implications on fiscal sustainability and intergenerational inequalities. The policy instruments examined include direct labour-income tax and indirect consumption taxes as well as health insurance contributions. Results show that in the absence of any policy adjustment, the implementation of UHC would explode the fiscal deficit and debt-GDP ratio. This indicates that the UHC-fiscal stance is rather unsustainable in the long term, thus, calling for a policy adjustment to service the UHC debt. Among the policies we examined, a current rather than deferred-debt finance through consumption taxation emerged to be preferred over other policies in terms of its implications for both fiscal sustainability and intergenerational inequality.