Cigarette Consumption Tax Policy Effect Evaluation

The tobacco epidemic is one of the greatest public health threats the world has ever faced,claiming nearly 6 million lives each year,more than 5 million of them as a result of direct tobacco use,more than 600,000 of them as non-smokers exposed to second-hand smoke.At present,about 50% of tobacco users die from tobaccorelated diseases such as respiratory diseases,lung diseases and cardiocerebrovascular diseases.China has set clear targets for tobacco control.According to the Healthy China Action Plan(2019-2030),the government will gradually increase the coverage of comprehensive smoke-free laws in the future,and ban smoking in indoor public places,workplaces and public transport across the country.In addition,the government has adopted comprehensive measures such as taxation and price adjustment to improve the effectiveness of tobacco control.In 2015,the State Administration of Taxation issued a notice on the adjustment of consumption tax on cigarettes: the AD valorem tax rate on cigarette wholesale was increased from5% to 11%,and a specific tax was levied at 0.005 yuan per cigarette.Scholars at home and abroad have studied the policy effect of cigarette consumption tax from different angles,mainly from the price elasticity of cigarette demand and the effect of tobacco control.Scholars have put forward the hypothesis that increasing the consumption tax rate of cigarettes will reduce the demand for cigarettes.The hypothesis is verified by the methods of demand price elasticity and regression analysis.The increase of cigarette consumption tax rate will reduce cigarette consumption of different gender,education level and income groups.From a tax perspective,this paper makes an empirical analysis and effect assessment of the tax policy,increasing the consumption tax rate of cigarettes in2015 by using the personal level panel data of China micro survey(CFPS2010-2018 data).Compared with the existing research,this paper uses micro data,which is based on the nationwide survey data and has a large sample,and is a supplement to the domestic research on cigarette tax policy from a macro perspective.In addition,this paper analyzes the heterogeneity of tax policies,and studies the impact of cigarette consumption tax policy adjustment in 2015 on different individual groups,such as different genders,education levels,age groups and so on.In addition,this paper studied the impact of cigarette consumption tax policy on the level of individual health status(whether they have chronic disease or not).In this paper,Heckman two-step model and DID model are used for analysis.Heckman's two-step model is designed to assess the impact of an increase in cigarette consumption tax on smoking after taking into account the sample selection bias of smoking.DID model is mainly considering the ever smoking status will affect the current level of tobacco consumption behavior and health,the samples were divided into control group(never smoking)and experimental group(once was smoking and smoking but had given up smoking),combining with the occurrence of tax policy,effect on smoking and health level of residents were analyzed.At the same time,after the full sample analysis,the samples were divided into gender for subsample study.The results showed that :(1)Overall,increasing cigarette excise tax reduced smoking;(2)Increasing cigarette consumption tax has a more significant effect on the lower age group and the residents with lower education level,which can reduce their smoking amount;(3)It is further found that after the increase of cigarette consumption tax,the possibility of people suffering from chronic diseases is reduced,which means that the level of health is improved.