Nisreen Salti

Relative deprivation and mortality in South Africa

This paper tests the relative income hypothesis by considering the relationship between mortality, income and relative deprivation in South Africa using individual-level data on income and five measures of relative deprivation each with a different reference group. We find that income tends to be protective of, and relative deprivation detrimental to health, but the latter often gives a better account of mortality than does income alone. For some population groups the fit is improved in specifications which include both income and relative deprivation. Overall, there seems to be solid evidence in support of the relative income hypothesis, particularly for the more economically disadvantaged population groups. Relative deprivation is especially significant when age is the reference group, suggesting that the comparison of socio-economic standing that has an impact on health tends to happen within cohorts. The results are robust to splitting the sample into urban/rural subsamples and to looking at the incidence of illness as the health outcome rather than mortality. While little is known about the mechanisms underlying the effect of relative deprivation on health and mortality, the consistent evidence in favor of age as a reference group, particularly in a context like South Africas suggests that intra-cohort comparisons should be an avenue for more in depth investigation.

The effect of taxation on tobacco consumption and public revenues in Lebanon

Background Tobacco consumption rates in Lebanon are among the highest worldwide. The country ratified the Framework Convention on Tobacco Control in 2005. A law was passed in 2011 which regulates smoking in closed public spaces, bans advertising, and stipulates larger warnings. Despite international evidence confirming that increasing taxation on tobacco products lowers tobacco consumption, no such policy has yet been adopted: a cigarette pack costs on average US

THE ROLE OF SECTARIANISM IN THE ALLOCATION OF PUBLIC EXPENDITURE IN POSTWAR LEBANON

1.50. To date no studies in Lebanon have addressed the welfare and public finance effects of increasing taxes on tobacco products. Methods Using the 2005 national survey of household living conditions, we estimate an almost ideal demand system to generate price elasticities of demand for tobacco. Using estimated elasticities and a conservative scenario for expected smuggling, we simulate the consumption and tax revenue effects of a change in the price of tobacco under various tax schemes. Results Increasing taxes on all tobacco products so as to double the price of imported cigarettes would lower their consumption by 7% and consumption of domestically produced cigarettes by over 90%. Young adults (ages 15–30) are more sensitive: consumption would drop by 9% for imported cigarettes and by 100% for domestic cigarettes. Government revenues would increase by approximately 52%. Conclusions The estimated elasticities indicate that an increase in taxes on all tobacco products would lead to a reduction in consumption and an increase in government revenue. Evidence from Lebanon on the effectiveness of increased taxation may help initiate national debate on the need to raise taxes.

Equity impacts of price policies to promote healthy behaviours

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Who's been left behind? Why sustainable development goals fail the Arab world

Governments can use fiscal policies to regulate the prices and consumption of potentially unhealthy products. However, policies aimed at reducing consumption by increasing prices, for example by taxation, might impose an unfair financial burden on low-income households. We used data from household expenditure surveys to estimate patterns of expenditure on potentially unhealthy products by socioeconomic status, with a primary focus on low-income and middle-income countries. Price policies affect the consumption and expenditure of a larger number of high-income households than low-income households, and any resulting price increases tend to be financed disproportionately by high-income households. As a share of all household consumption, however, price increases are often a larger financial burden for low-income households than for high-income households, most consistently in the case of tobacco, depending on how much consumption decreases in response to increased prices. Large health benefits often accrue to individual low-income consumers because of their strong response to price changes. The potentially larger financial burden on low-income households created by taxation could be mitigated by a pro-poor use of the generated tax revenues.

The Economics of Tobacco in Lebanon: An Estimation of the Social Costs of Tobacco Consumption

1–5 Evidence of persistent infectious disease in low-income and middle-income Arab countries exists, alongside increased prevalence of non-communicable diseases in all Arab countries, 6,7 high out-of-pocket health expenditure, 8 poor access to safe water, as well as violent confl ict, persistent foreign interventions, and high levels of social and political fragmentation that result in weak health systems and diminished rights to health. 9 Two sets of indicators, with important implications for health and development, are strikingly extreme in the Arab region (appendix). First, the Arab world has ten times the per person world average number of refugees and, in the Gulf Cooperation Council (GCC) countries, the highest number of international migrant workers as a percentage of the population at more than ten times the world average. Second, the Arab world has high levels of militarisation, with weapons imports per person at more than four times the world average. Additionally, the Arab world has the lowest ratios of health to military expenditures at less than one-fi fth of the world average.

The health, financial and distributional consequences of increases in the tobacco excise tax among smokers in Lebanon.

Objectives: Assess the socioeconomic costs of smoking in Lebanon and understand the tobacco market and identify the winners and losers from the Lebanese tobacco trade. Methods: We take a close look at the market for tobacco and related markets to identify the main stakeholders and estimate the direct costs and benefits of tobacco. We also estimate lower bounds for the costs of tobacco, in terms of lost productivity, the cost of medical treatment, lost production due to premature death, and environmental damage. The paucity of data means our cost estimates are conservative lower bounds and we explicitly list the effects that we are unable to include. Results: We identify the main actors in the tobacco trade: the Régie (the state-owned monopoly which regulates the tobacco trade), tobacco farmers, international tobacco companies, local distributors, retailers, consumers, and advertising firms. We identify as proximate actors the Ministries of Finance and Health, employers, and patients of smoking-related illnesses. In 2008, tobacco trade in Lebanon led to a total social cost of

Income inequality and the composition of public debt

326.7 million (1.1% of GDP). Conclusion: Low price tags on imported cigarettes not only increase smoking prevalence, but they also result in a net economic loss. Lebanese policymakers should consider the overall deficit from tobacco trade and implement the guidelines presented in the Framework Convention on Tobacco Control to at once increase government revenue and reduce government outlays, and save the labor market and the environment substantial costs.

ON THE POVERTY AND EQUITY IMPLICATIONS OF A RISE IN THE VALUE ADDED TAX: A MICROECONOMIC SIMULATION FOR LEBANON

Tobacco use is a significant risk factor for the leading causes of death worldwide, including cancer, heart disease and stroke. Most of these deaths occur in low- and middle-income countries, where tobacco-related deaths are also rising rapidly. Taxation is one of the most effective tobacco control measures, yet evidence on the distributional impact of tobacco taxation in low- and middle-income countries remains scant. This paper considers the financial and health effects, by socio-economic class, of increasing tobacco taxes in Lebanon, a middle-income country. An Almost Ideal Demand System is used to estimate price elasticities of demand for tobacco products. Extended cost-effectiveness analysis (ECEA) methods are applied to quantify, across quintiles of socio-economic status, the health benefits gained, the additional tax revenues raised, and the net financial consequences for households from a 50% increase in the price of tobacco through excise taxes. We find that demand for tobacco is price inelastic with elasticities ranging from −0.32 for the poorest quintile to −0.22 for the richest quintile. The increase in tobacco tax is estimated to result in 65,000 (95% CI: 37,000–93,000) premature deaths averted, 25% of them in the poorest quintile,

THE POLITICAL ECONOMY OF ATTRACTING PUBLIC FUNDS: THE CASE OF LEBANON

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