Objective: During the past decades, smoking prevalence in Greece was
estimated to be near or over 40%. Following a sharp fall in cigarette
consumption, as shown in current data, our objective is to assess
smokers’ sensitivity to cigarette price and consumer income changes as
well as to project health benefits of an additional tax increase.
Methods: Cigarette consumption was considered as the dependent variable,
with Weighted Average Price as a proxy for cigarette price, gross
domestic product as a proxy for consumers’ income and dummy variables
reflecting smoking restrictions and antismoking campaigns. Values were
computed to natural logarithms and regression was performed. Then, four
scenarios of tax increase were distinguished in order to calculate
potential health benefits.
Results: Short-run price elasticity is estimated at -0.441 and short-run
income elasticity is estimated at 1.040. Antismoking campaigns were
found to have a statistically significant impact on consumption. Results
indicate that, depending on the level of tax increase, annual per capita
consumption could fall by at least 209.83 cigarettes; tax revenue could
rise by more than (sic)0.74 billion, while smokers could be reduced by
up to 530 568 and at least 465 smoking-related deaths could be averted.
Conclusions: Price elasticity estimates are similar to previous studies
in Greece, while income elasticity estimates are far greater. With
cigarettes regarded as a luxury good, a great opportunity is presented
for decisionmakers to counter smoking. Increased taxation, along with
focused antismoking campaigns, law reinforcement (to ensure compliance
with smoking bans) and intensive control for smuggling could invoke a
massive blow to the tobacco epidemic in Greece