Common sense may suggest that since tobacco is addictive, smokers will just dig deeper into their pockets or purses when prices go up. But data from around the world shows just the opposite: more than 100 studies, mainly done in richer countries, demonstrate that when cigarette prices rise by, for example, 10 per cent, smoking will decline by at least 2.5 per cent; most studies assess the effect at 4 to 8 per cent.
In most countries smoking has been in decline for decades, which is hardly a surprise: epidemiological studies dating back more than 70 years have definitively demonstrated that smoking kills. Tobacco users have 10 times the lung-cancer rate of non-smokers; for heavy smokers the risk doubles again. And that’s just the biggest of tobacco’s many dangers to health.
To be sure, much of the worldwide decline in smoking has been caused by users’ health concerns. But there is also solid evidence that a higher price gives some smokers the extra impetus they need to quit, and deters other people, mainly the young, from starting to smoke. Higher prices also reduce the rate of relapses back into smoking, and cut the number of cigarettes the average smoker uses per week.
So Dubai’s move to double cigarette prices is far-sighted as well as courageous. Other emirates should follow. And federal legislation, drafted but not yet in force, could force prices higher still.
In some countries, some or all of the money raised from such taxes goes into public-education campaigns intended to make sure that nobody has any doubt that tobacco is a killer.
Unfortunately, some governments must use some of the revenue for the fight against smuggled or illicitly-produced cigarettes, sold untaxed through informal distribution networks. This country’s borders are less porous than those of many others, but more-nearly uniform prices across the UAE would prevent “leakage” of cheaper smokes into Dubai.
Few policy initiatives are as simple to implement and as beneficial as this tax increase. This is one price that really should keep going up.