URL corta: ciep.mx/5q8J

The literature on tobacco has shown that smoking has a negative effect on health and overall well-being. It has also shown that one of the most effective policie to reduce tobacco use is to increase tobacco taxes and prices. However, tobacco consumption is inelastic, which means that an increase in price does not translat into a reduction in consumption as equal as the increase in prices, and this is why the net effects of a policy to increase the price of tobacco is not clear.

This analysis shows that raising tobacco taxes in Mexico effectively reduces consumption by making people stop buying cigarettes (quitting) or preventing new smokers from starting to smoke. Tax increases reduce consumption, and also reduce medical expenses for each income group and at all levels of elasticity. The benefits are greatest in reduced medical expenses, which outweigh for each income group and level of elasticity any negative effects resulting from an increase in tobacco spending.

So far, the documents generated and authorized for publication are the following: