How Tobacco Control Measures and Smuggling Influence Demand in Panama

Panama's tobacco epidemic demonstrates the importance of strong fiscal policies and other control measures to curb demand. This research will establish how demand for tobacco products responds to price and changes in income.

With per capita income increasing, tobacco products are more affordable in Panama. This may lead to greater tobacco use, particularly among 12 to 17 year-olds, unless the government revises fiscal policies to address the problem.

This project will support policymakers' efforts to develop control measures to curb demand. Using monthly ranges for the last 10 years, researchers will estimate income elasticity and price elasticity of demand for tobacco products.

They will demonstrate the relationship between tax rates and tax revenue. Their goal: establish a new threshold for increasing the luxury tax on tobacco products, including cigarettes, based on the monthly evolution of cigarette sales.

The researchers will survey brands in commercial areas to determine access to contraband cigarette products. They will incorporate preliminary results from the Global Adult Tobacco Survey, led by the Ministry of Health and the Instituto Conmemorativo Gorgas de Estudios de la Salud in 2012. This data will be integrated into a more structured analysis of demand, with time ranges and cross-sectional data. It will allow researchers to evaluate the effectiveness of tobacco control measures and assess the impact these measures could have on contraband products.

Project ID

106842

Project status

Closed

Start Date

Friday, March 2, 2012

End Date

Saturday, March 2, 2013

Duration

12 months

IDRC Officer

Leppan, Wardie

Total funding

CA$ 79,800

Countries

North and Central America, Panama, South America

Program

Food, Environment, and Health

Project Leader

Victor Hugo Herrera Ballesteros

Institution

Instituto Conmemorativo Gorgas de Estudios de la Salud

Institution Country

Panama

Institution Website

http://www.gorgas.gob.pa