Economics of Consumption Tax on Unhealthy Goods.
Economics of Consumption Tax on Unhealthy Goods.
Introduction:
Unhealthy consumption prevails in the fields of nutrition, energy and transport. Taxing is one a solution to provide a healthier living. With globalization, qualities of goods do fail to meet the international standards. International movements of goods which damage health are increasing with Cross border marketing, promoting unhealthy behaviours of alcohol and tobacco consumption and unhealthy diets. (Richard Smith, 2003). The report narrows down to Daily life consumption of tobacco and alcohol considering the impact of individual’s income, price of the produce and the substitutions available briefing on supply and demand. The taxing of unhealthy goods is segmented under consumption taxation rather than on income. For addictive goods, the level of consumption today not only causes harm tomorrow, but also increases the marginal benefit of future consumption. Literally every country charges through some sort of ad valorem tax through value added tax, sales tax or an expenditure tax.
Economic Models to study Demand for Cigarettes:
Studies on demand for cigarettes have applied several types of economic models to different types of data with various estimation techniques. In general, two types of economic models are used: the conventional demand model and the addictive demand model. These models have been applied to two types of data: aggregate level data including time-series data for a single geographical unit and pooled cross-sectional time-series data, and individual level of survey data.
Conventional demand models which use aggregate data normally specify the demand equation in a way that the quantity of cigarettes demanded is a function of cigarette prices, income, tobacco control policies and a variety of socioeconomic and demographic factors. But there are two exceptions (Baltagi and Goel, 1987; Peterson et al., 1992), in which a quasi-experiment approach
Introduction:
Unhealthy consumption prevails in the fields of nutrition, energy and transport. Taxing is one a solution to provide a healthier living. With globalization, qualities of goods do fail to meet the international standards. International movements of goods which damage health are increasing with Cross border marketing, promoting unhealthy behaviours of alcohol and tobacco consumption and unhealthy diets. (Richard Smith, 2003). The report narrows down to Daily life consumption of tobacco and alcohol considering the impact of individual’s income, price of the produce and the substitutions available briefing on supply and demand. The taxing of unhealthy goods is segmented under consumption taxation rather than on income. For addictive goods, the level of consumption today not only causes harm tomorrow, but also increases the marginal benefit of future consumption. Literally every country charges through some sort of ad valorem tax through value added tax, sales tax or an expenditure tax.
Economic Models to study Demand for Cigarettes:
Studies on demand for cigarettes have applied several types of economic models to different types of data with various estimation techniques. In general, two types of economic models are used: the conventional demand model and the addictive demand model. These models have been applied to two types of data: aggregate level data including time-series data for a single geographical unit and pooled cross-sectional time-series data, and individual level of survey data.
Conventional demand models which use aggregate data normally specify the demand equation in a way that the quantity of cigarettes demanded is a function of cigarette prices, income, tobacco control policies and a variety of socioeconomic and demographic factors. But there are two exceptions (Baltagi and Goel, 1987; Peterson et al., 1992), in which a quasi-experiment approach
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