In Montevideo, Uruguay, a Universidad de la República (Udelaar) study projected that a 60% increase in cigarette taxes from 2025 to 2028 would reduce smoking by 19% (49,000 people) and yet increase tax revenue by 24%. The research, led by Patricia Triunfo and Zuleika Ferre, analyzed data from 1997 to 2022, confirming that Uruguay’s anti-smoking policies since 2010 have significantly lowered consumption.
The study highlights a price elasticity of -0.47, indicating tax hikes effectively reduce demand. Smoking accounts for 15% of adult deaths in Uruguay, 16.7% of health expenditure, and 50% of smokers die prematurely.
“Evaluating public policies is a challenge because of how they are implemented, sometimes in simultaneous layers,” said Triunfo. “The big drama is to demonstrate causality between policies and reduction of smoking.”
The study used aggregate data on legal cigarette sales, combined with variables such as prices, income, and regulations. Their work included collaborations with Jeffrey Harris of the Massachusetts Institute of Technology (MIT) and funding from the Bloomberg Foundation.
