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Economic Remedies to Reduce Smoking

  • John Joshua
Chapter
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Abstract

Taxes imposed on the consumption of tobacco may be regarded as regressive, firstly because poorer smokers pay a greater proportion of their income in tax for each cigarette smoked, and secondly, lower social classes tend to smoke more than those in other social classes. However, the external cost caused by smoking has to be considered. A Pigovian tax may be imposed to compensate for the external costs resulting from smoking which could be earmarked to cover the external costs caused by smoking. The effectiveness of a tax policy will depend on elasticity of demand. Price interventions are the most effective policies in reducing the rate of mortality caused by smoking; the effectiveness increases when combined with non-price interventions.

Keywords

Economic remedies Elasticity of demand External costs Non-price intervention Pigovian tax Regressive tax 

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Copyright information

© The Author(s) 2017

Authors and Affiliations

  • John Joshua
    • 1
  1. 1.Deakin UniversityMelbourneAustralia

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