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Tuesday, 22 May 2018 12:03

The Impact of Income and Taxation in a Price...

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Researchers used transition matrices of ITC survey results to identify effects of changes in price and income with other control variables. These matrices show the significant movement of smokers across price tiers over time. “It is evident from the results that a price-tiered market provides smokers more opportunities to accommodate their smoking behavior when faced with price and income change

. Therefore, tiered structure of the tax system should be replaced with uniform taxes. Moreover, overall cigarette taxes need to be raised so that they offset any positive effects of income growth.”

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