Cost-Benefit Analysis of Tobacco Consumption in Peru (Policy Brief)

This Policy Brief was written by the Instituto de Estudios Peruanos (IEP) in Peru. The policy brief estimates the heath and income impacts of increasing the Special Consumption Tax on cigarettes, which would raise cigarette prices by 10%. The authors find that low- and middle- income groups save more than 3 million soles annually in this scenario as a result of decreased consumption. In addition, there is a long-term decrease in medical spending experienced by all income groups, along with increased productivity. The research confirms that such a price increase would financially benefit all Peruvian households, and especially low-incomes ones, in the short-, medium-, and long- term.

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A corresponding Report can be found here.