To be fair, the issue of illicit tobacco is important and should be investigated. Dodgy research isn’t in any one’s interests – not short term interest and definitely not in anyone’s long term interest. The problem as I see it is that the public health lobby have become so obsessed with destroying the tobacco industry that they are unwilling to concede any argument at any margin.
So here is the claim:
Tobacco taxes are critical in reducing tobacco consumption, thereby improving public health. However, the tobacco industry claims that tax increases will increase illicit tobacco trade. Therefore, research evidence on the size of the illicit cigarette market is needed in Georgia and other low-income and middle-income countries to inform tobacco tax policies.
Completely agree. Not just the tobacco industry mind you, economists going all the way back to Adam Smith have argued that excessive taxation gives rise to smuggling. So how do our researchers approach the problem?
Smokers were asked to show available cigarette packs to the surveyors. These were examined for tax stamps and health warnings which allowed for an assessment of illegal cigarette consumption in Georgia.
The researchers went to houses, knocked on the door, and asked the inhabitants if anyone in the house hold smoked and if so, could the researcher see the packet. Now that is a simplification but in essence that is the method. So a stranger comes to your door and asks if you or anyone in your household is breaking the law. The result?
The packs shown to surveyors suggest illicit cigarette trade is low (1.5%), although with regional differences, as illicit cigarette packs were present in 6% of the households in Zugdidi.
That is a very surprising result. But that isn’t what made me laugh. This did:
This estimate might be conservative, as 28% of respondents did not show any packs to the surveyors.
28% of smokers didn’t have any cigarettes at home? There is a further ‘limitation’ of the study reported in the main body:
A limitation of our study approach is that we could not test the tax stamps for their legitimacy due to limited budget.
So what they found is the very obviously illicit tobacco and not the better quality fakes and forgeries while missing the 28% of respondents who effectively refused to show their packets.