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The objective of this article is to estimate the own-price, cross-price and income elasticities of demand for SSB in Ecuador, as an indispensable step for predicting a reduction in the consumption of said beverages caused by the potential implementation of taxes in Ecuador. In addition, the own-price, cross-price and income elasticities of sugar-free substitutes like mineral water and diet soft drinks and juices are also estimated. The data from the 2011-2012 ENIGHUR, which contains detailed information on household consumption and socioeconomic variables, was used. The estimates are done using Deaton's Almost Ideal Demand System (AIDS) which accounts for differences in the quality of goods purchased. This demand system is estimated for different socio-economic groups, according to total household expenditure. The results reveal own-price elasticities for SSB between -1.17 and -1.33 depending on the socio-economic group, in line with the existing evidence for developed countries. Own-price elasticity for non-SSB is between -1 and -1.24. Income elasticities reveal that both SSB and non-SSB are normal goods with elasticities decreasing for higher socio-economic groups. These results show that the consumption of SSB is sensitive to price changes, meaning that the implementation of taxes on said beverages could be effective in reducing their consumption. The fact that non-SSB are also sensitive to price changes would indicate that subsidies could be implemented for the production of some of them.

Smoking is a worldwide epidemic and increased prices are one of the most cost-effective measures to reduce tobacco consumption. This article aims to estimate the price and income elasticity of cigarettes for different population groups in Ecuador. The National Survey of Urban and Rural Household Income and Expenditures (ENIGHUR) 2011–2012 was used, which has information on household cigarette consumption and its sociodemographic characteristics. Deaton’s Almost Ideal Demand System, which decouples the effect of quality on the price of the good, was applied. The elasticities were calculated for several groups: urban/rural, income levels (tertiles), education level, sex and age ranges of the household head, and frequency of cigarette purchases in households. The estimated price elasticity nationwide is -0.89 and the income elasticity is 0.41, both statistically significant. Households headed by women (-2.22) are more sensitive to an increase in cigarette prices than those headed by men (-0.65) and households headed by people between 20 and 40 years of age (-2.32) have a higher price elasticity compared to country-level estimations. Differences within other groups are not statistically significant.

Guillermo Paraje and colleagues argue that excise taxes are the most effective yet least implemented measure for tobacco control and that overcoming tobacco industry opposition could prevent millions of premature deaths

[This corrects the article DOI: 10.1371/journal.pone.0303328.].

Chile is among the countries with the highest alcohol consumption per capita in Latin America, but little has been done in the way of public policy and policy research to overcome this problem. The objective of the present study is to estimate demand elasticities (own-price, cross-price, expenditure and quality) for three groups of alcoholic beverages in Chile: spirits, wines, and beers. The study uses data from the VII Encuesta de Presupuestos Familiares (Family Budget Survey) 2011-2012 conducted by the National Institute of Statistics. Because of problems with the quality of the measurement units, hot-deck imputation method was used with the alcohol purchases that presented problems. To estimate the demand elasticities, the Almost Ideal Demand System (AIDS) method proposed by Deaton was used. Quality decisions were estimated for each beverage separately using an equation proposed by Deaton in the three-step AIDS. The estimated elasticities were more inelastic for spirits (-0.14, P<0.01), followed by wines (-0.77, P<0.01) and beers (-0.93, P<0.01). Spirits reported less sensitivity to changes in the total budget, while wines reported the most sensitivity to changes in the total budget (expenditure elasticity). Wines also reported the most sensitivity related to quality for changes in the total budget (0,20, meaning that a 10% increase in a household's total expenditure increases the \"quality\" of purchased wines by 2%). Own-price elasticities reported for spirits, wines and beers are consistently negative, and inelastic, in line with international evidence. Although own-price elasticities for spirits is more inelastic than found in most studies, its quality-elasticity is more positive and greater. This could be explained by the greater price dispersion of spirits, as well as spirits (and wine) being consumed more than beers in Chile. This in turn may be because consumers have the option of switching to cheaper, Chilean-produced spirits such as pisco and wines when prices rise. The existence of these relatively broad quality-elasticities points to the need for a change in the alcohol tax structure from the current ad-valorem tax to a specific tax that could reduce price dispersion and curb total consumption.

The objective of this article is to examine the factors associated with smoking of flavor capsule cigarettes in Chile, where the popularity of these products has increased dramatically, a trend increasingly observed across the world. A representative poll of 851 smokers in Metropolitan Santiago de Chile, which comprises 40% of the country's total population, was implemented in mid-2017. Smokers were given a questionnaire that collected socio-demographic information and information on smoking patterns. Four discrete-choice models were estimated on the decision to smoke flavor capsule cigarettes to better understand the statistical relationships between traits of smokers and the consumption of flavor capsule cigarettes. The results of these models show that each year less in a smoker's age increases the likelihood of preferring flavor capsule cigarettes by, on average, between 0.8 and 0.9 percentage points. If the smoker is a woman, the likelihood of preferring flavor capsule cigarettes increases between 13.4 and 13.5 percentage points. Results also reveal a positive relationship between the price paid and the consumption of flavor capsule cigarettes, indicating that these cigarettes tend to be more expensive. There is no statistical relationship between participation in the labor market and smoking these products. Chile has the world's highest prevalence of flavor capsule cigarette smoking, which is concentrated among young people (25 years and younger) and females. No relationship between socioeconomic status and use of these products is found, though there are indications that such relationship may exist, as they were at the time of study 14% more expensive, on average, than conventional non-flavored cigarettes. As in most countries, the tobacco industry appears to be deliberately promoting these products with the goal of halting or slowing the decline in cigarette consumption in Chile. Thus, to reduce cigarette consumption (especially among youth), restricting or forbidding cigarette flavorings of all types, including flavor capsules, would be an effective strategy.

In recent decades, policy initiatives involving increases in the tobacco tax have increased pressure on budget allocations in poor households. In this study, we examine this issue in the context of the expansion of the social welfare state that has taken place over the last two decades in several emerging economies. This study explores the case of Colombia between 1997 and 2011. In this period, the budget share of the poorest expenditure quintile devoted to tobacco products of smokers’ households doubled. We analyse the differences between the poorest and richest quintiles concerning the changes in budget shares, fixing a reference population over time to avoid demographic composition confounders. We find no evidence of crowding-out of education or healthcare expenditures. This is likely to be the result of free universal access to health insurance and basic education for the poor. For higher-income households, tobacco crowds out expenditures on entertainment, leisure activities, and luxury expenditures. This finding should reassure policymakers who are keen to impose tobacco taxes as an element of their public health policy.

The article reviews the large body of evidence on how taxation affects the consumption of tobacco, alcohol, and sugar-sweetened beverages (SSB). There is abundant evidence that demand for tobacco, alcohol, and SSB is price-responsive and that tax changes are quickly passed on to consumers. This suggests that taxes can be highly effective in changing consumption and reducing the burden of diseases associated with consuming these products. Tobacco, alcohol, and SSB industries oppose taxation on similar grounds, mostly on the regressivity of taxes since regressive taxes take a larger percentage of income from low income earners than from middle and high income earners; but also on the effects taxes might have on employment and economic activity; and, in the case of tobacco, the effects taxation has on illicit trade. Contrary to industry arguments, evidence shows that taxation may have short-term negative financial consequences for low-income households. However, medium and long-term financial benefits from reduced healthcare costs, better health, and welfare largely compensate for such consequences. Moreover, taxation does not negatively affect aggregate economic activity or employment, as consumers switch demand to other products that generate employment and may compensate for any employment loss in taxed sectors. Evidence also shows the revenues generated are generally spent on labour-intensive services. In the case of illicit trade in tobacco, evidence shows that illicit trade has not increased globally (rather the opposite) despite increases in tobacco taxes. Profit-maximising smugglers increase illicit cigarette prices along with the increases in licit cigarette prices. This implies that even when increased taxes divert some demand to the illicit market, they push prices up in the illicit market, discouraging consumption.

Background Sugar-sweetened beverages (SSB) consumption is associated with overweight and obesity, which are important drivers for the increasing healthcare and other social costs. If expenditures on SSB decrease expenditures on other goods and services, such as education and healthcare, this “crowding-out” may have a lasting effect. The main objectives of this article are, first, to estimate the statistical association between the decision of spending in SSB and several households’ sociodemographic characteristics; and second, to estimate the association between the decision of buying SSB and budget allocation across categories in Jamaica. Methods Using the Jamaican Household Expenditure Survey 2004–2005 a generalized ordered probit model was estimated to examine the association between socioeconomic variables and the decision to spend on SSB. Seemingly Unrelated Regression Equations (SURE) of all the expenditure groups (except the SSB group) were used to estimate the association between the decision of buying SSB and budget allocation on other goods and services. Results Expenditures on SSB are negatively affected by the size of the household and the area of residence (rural households spend more on SSB than urban ones), while having a larger proportion of children (15 or younger) and having a larger total budget is associated to more expenditures on SSB. Households with positive expenditure on SSB allocate significantly less budget to “Healthcare” and “Education”, when compared to those who did not buy SSB. Conclusions SSB expenditures may displace expenditures in necessary goods and services, which implies that decreasing the proportion of budget spent on SSB may have important present and future consequences on poorer households’ human capital accumulation and future incomes.

We examined the impact of tobacco prices or taxes on tobacco use in Latin America and Caribbean countries. We searched MEDLINE, EconLit, LILACS, unpublished literature, 6 specialty journals, and reviewed references. We calculated pooled price elasticities using random-effects models. The 32 studies we examined found that cigarette prices have a negative and statistically significant effect on cigarette consumption. A change in price is associated with a less than proportional change in the quantity of cigarettes demanded. In most Latin American countries, own-price elasticity for cigarettes is likely below  −0.5  (pooled elasticities, short-run: −0.31; 95% confidence interval = −0.39, −0.24; long-run: −0.43; 95% CI = −0.51, −0.35). Tax increases effectively reduce cigarette use. Lack of studies using household- or individual-level data limits research’s policy relevance.