17 juillet 2009
Tobacco Impacts
CBO also estimates that the amount of tax revenues and settlement funds collected by state and local governments would decline as a result of the federal regulations authorized by this bill because of lower consumption of tobacco products.
However,
those declines in revenues, estimated to total over $1 billion during the 2010-2014
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period, would not result from intergovernmental mandates. Rather, the decline in
revenues would be an indirect effect on state and local governments resulting from the
new federal regulations imposed on companies that manufacture and distribute tobacco
products.
In 2008, state and local governments collected about $19 billion in revenues from excise
and general sales taxes levied on tobacco products. CBO estimates that this bill would
lower consumption of those products and that excise taxes collected by state and local
governments would fall by about $20 million in 2010, with that reduction growing to
over $300 million in 2014. Similarly, CBO estimates that state and local governments
would see a decline in sales-tax revenues of about $160 million over the 2010-2014
period.
07 juillet 2009
Changes in cigarette prices
A large number of studies have been conducted to estimate demand for cigarettes in many countries.
The estimated price elasticities of demand for cigarettes from those studies vary. But most of the
estimates tend to be less than one, i.e., the demand for cigarettes is price-inelastic. A meta-analysis of
the determinants of cigarette consumption, which analysed results from 48 studies, yielded a weighted
mean price elasticity of demand for cigarettes of -0.4.
The short-term
price elasticity recommended by an expert panel for policy analysis is -0.4 . The long-term elasticity is about 1.5 times the short-term price elasticity. Youth and the poor
tend to be more responsive to changes in cigarette prices. Income, in general, is positively related to
demand for cigarettes. The estimated income elasticity is 0.36, but decreases with time. Restrictions on
smoking in public places and private work sites have significantly reduced demand for cigarettes
02 juillet 2009
Value of unprocessed tobacco
The value of unprocessed tobacco production in 1999 was US$1 100 billion, over 9 times the value for 1970, an increase only partly attributable to increased production.
Comparing domestic prices with international prices, using the so-called Nominal Protection Coefficient (NPC), gives an estimate of the magnitude of market price distortion resulting from agricultural policies. During the 1970s, domestic and international price trends for unprocessed tobacco were very similar, in both direction and magnitude. However, in the first half of the 1980s, domestic prices declined while international prices were increasing slightly, tobacco producers were taxed rather than being supported. In contrast, in the 1990s, domestic prices began increasing faster than international prices indicating that protection to producers was increasing.