Assessing the Microlevel Impacts of Sin Tax Law on Cigarette Consumption: A Case Study for Mahaplag, Leyte, Philippines

Abstract

Examined in this study were the effects of Sin Tax Law at the microlevel. Using the before-and-after method of analyzing impacts, we applied a multiple regression analysis incorporating difference-in-difference approach of econometric estimation. It appeared that youths had significantly lower cigarette consumption after the implementation of this law. This suggests that Sin Tax Law (STL) discouraged the youth from smoking. In contrast, consumption of cigarettes among adults did not change significantly implying that the tax induced price-increase was relatively less effective. Therefore, it is recommended that there should be specific policies targeting adult smokers to inhibit them from consuming more cigarettes. Results also provide important lessons for future research in monitoring and evaluating public policies.