TL;DR

• The death toll of tobacco dwarfs traditional EA global health focuses (e.g. Malaria).
• Taxing tobacco is the most effective and yet most neglected form of reducing tobacco consumption.
• Multiple EA orgs have ran cost-effectiveness numbers that would put a tobacco taxation NGO on GiveWell’s list (both in expected value and contingent on success) and even at the top in some cases.
• Despite this, no enduring tobacco-taxation advocacy organization has emerged from EA (which would be the only advocacy organization in the world exclusively dedicated to tobacco taxation)
• Join Joel Tan (Founder of CEARCH) and J.T. Stanley, who as incubatees of Charity Entrepreneurship closely examined tobacco taxation, on June 10^th (Saturday) at 14:00 UTC for a virtual discussion about the intervention and what’s next to make it a reality.

Thanks to Moritz von Knebel for providing feedback on the draft.

Yes, I cite WHO a lot. Not all WHO citations are the same WHO link FYI.

Problem space

• Tobacco kills over 8 million individuals a year—that’s 13x Malaria (WHO) (CDC).
• Another way of framing it: annually more people are killed by tobacco usage than malaria, HIV, and neonatal deaths combined… twice over. And while the death toll of the latter three has been decreasing over time, death from tobacco is increasing.
• Of the 8 million deaths, 1.2 million are bystanders killed from secondhand smoking (WHO).

Facts not related to death:

• Tobacco consumption displaces productive forms of spending. Tobacco consumes 1.5 to 17% (with a rough median around 4.5%) of a person’s income depending on country and socioeconomic status (table of results) (de Beyer et al., 2001). Spending on tobacco typically displaces spending on education and nutrition in low-income households (John, 2008) (Nonnemaker and Sur, 2007) (Pu et al., 2008).
• For example, smoking households spent 46% less on education than non-smoking households in surveyed townships in rural China (Wang et al., 2006). Another study states, “Average male cigarette smokers [in Bangladesh] spend more than twice as much on cigarettes as per capita expenditure on clothing, housing, health and education combined” (Efroymson et al., 2001).
• Smoking decreases productivity (Tobacconomics, 2019) (Halpern et al., 2001). One study in the United States found that it cost 1,807 USD per year per smoker in lost productivity compared to non-smokers (Bunn III et al., 2006).
• Tobacco increases individual healthcare costs (Tobacconomics, 2019). A study in China found that individual medical spending attributable to smoking increased the poverty rate by 1.5% in urban areas and 0.7% in rural areas (Liu et al., 2006).
• Tobacco strains the healthcare sector and taxpayers foot the bill (Wunsch and Brodie, 2021) (Tobacconomics, 2019).
• The annual costs of tobacco from healthcare expenditures and losses in productivity are 1.8% of the world GDP, breaking down to 1.1% to 1.7% of LMICs’ GDPs (Goodchild et al., 2018) (Tobacconomics, 2019).

One last fact: without intervention, tobacco is on track to kill a billion individuals during the 21st century (WHO, 2008) (Savedoff and Alwang, 2015) (Jha, 2012).

The intervention 

• The scientific literature on tobacco consumption is lengthy. The interventions that have the most significant effect on reducing tobacco consumption have been formalized in WHO’s MPOWER framework (Kaleta et al., 2009).
• Of the MPOWER tobacco control measures, taxing tobacco has been demonstrated consistently in the scientific literature to the be the most effective intervention (WHO) (NIH).
• Taxing tobacco has a price elasticity around -0.5, meaning that for a 10% increase in retail price of tobacco, consumption decreases by 5% in LMICs (4% in HICs) (NIH) (WHO)[2]
• Despite being the most effective intervention, tobacco taxation is the most neglected (WHO) (World Bank).

Cost effectiveness

• Giving What We Can explored a few estimates of the impact of reducing tobacco consumption and found it is plausible that the cost per life saved could reach 800 USD (Report) (Blog post)
• Charity Entrepreneurship has calculated an expected value of 51 USD per DALY averted by a tax increase of 23.7% in Mongolia with 27.14% chance of success. (Spreadsheet)
• Open Philanthropy’s BOTEC on Indonesia found 30 USD per DALY averted in expectation with a 10% probability of success, million-dollar campaign, 10% increase in retail price, and a counterfactual speed up of 3 years. (Spreadsheet)
• Moritz von Knebel and I, Charity Entrepreneurship incubatees, found (Spreadsheet):
  • A policy victory would typically yield a DALY averted for single-digit dollars (9.49 and 1.01 USD in Nepal and Iran, respectively)[3] and even just cents in some cases (0.49 USD in Canada)[4] for just charity costs.
  • When accounting for government costs, the range was single digits (6.62 USD in Canada) to low three digits (155.67 USD in Mongolia)[5]. Estimates were most worsened (i.e. Kuwait, Mongolia) if we assigned a high probability that the government would increase the tax rate soon in the future independent our intervention.[6]
  • Accelerating Nepal enacting a tax increase of 24% by little more than half a year has an expected value of 59 USD per DALY averted with a probability of success of 27.5%.

EA’s journey with tobacco taxation

• In 2013, Open Philanthropy conducts a shallow investigation of tobacco taxation in LMICs.
  • “A philanthropist could undertake any of a variety of strategies to attempt to ensure passage and enforcement of such [tobacco taxation] policies. We do not have a good sense of the likely returns to the different potential strategies.”
  • “Our research in this area has been relatively limited, and many important questions remain unanswered by our investigation.”
• In 2015, Giving What We Can releases a report and blog post on tobacco control heavily featuring tobacco taxation.
  • “At the beginning of this post, I asked whether tobacco taxes can really claim to be one of the most—or even the most—cost-effective way of saving lives in the developing world. I think we have good reason to think they are, though we should ask for answers to the above questions—or at least better answers than I’ve been able to give.”
  • “Tobacco taxes appear to be a highly cost-effective way to save lives in the developing world. I suspect that further research will show that well-run tax advocacy organizations can save lives as cheaply as the charities currently touted by organizations like GiveWell and Giving What We Can. For now that research remains to be done.”
• In 2016, Charity Entrepreneurship does shallow research on tobacco taxation.
  • “The evidence for lobbying succeeding in LMIC is far weaker than the evidence for the impact of successfully implemented tobacco taxation. It’s often difficult to credit responsibility for legislative change to particular players in advocacy campaigns because multiple campaigns operate simultaneously and it’s unclear whether the government would have changed anyway, absent lobbying efforts. While there is considerable evidence the government implementation of tobacco taxation is highly cost-effective, there is a dearth of analysis on the return of investment of actual lobbying campaigns.”
• In 2017, GiveWell conducts three interviews on tobacco control. (The Union) (Campaign for Tobacco-Free Kids) (Author of the “The Single Best Health Policy in the World: Tobacco Taxes”)
• In 2017, Charity Entrepreneurship recommends tobacco taxation as one of four recommended ideas in their first-ever charity incubation.
• In late 2019, two tobacco-taxation charities emerge from Charity Entrepreneurship’s second-ever incubation program.
• In 2020, both Charity Entrepreneurship tobacco-taxation charities shutdown largely due to COVID ramifications.[7] (Good Policies) (Policy Entrepreneurship Network)
• In 2020, GiveWell conducts three interviews on tobacco control. (Vital Strategies) (Founder of Good Policies) (International Development Research Centre)
• In 2022, Charity Entrepreneurship updates their research report on tobacco taxation and recommends it to another incubation round.
  • “There is very strong evidence linking tobacco to many negative health outcomes… There is also very strong evidence that increasing tobacco taxes reduces tobacco consumption… Our own cost-effectiveness analyses have also shown that tobacco taxation is an extremely cost-effective intervention… There is strong evidence that this intervention can be effectively delivered by the government… Regarding the probability of success of advocacy for this intervention, looking at a total of 159 case studies, we see an average success rate of ~27.14%.”
    “Despite the promise of this intervention, there are some concerns. There are two main funders in the space, but they favor large, well-established organizations, so funding might be a limiting factor… Another concern about this intervention is neglectedness. There are a few organizations working in this space that appear to be quite successful, are well-funded, and are targeting high-burden countries. The key strategy might lie in focusing on countries in which other organizations are not currently working (which might not be the most burdened countries, but still high-burden).”
• In 2023, Open Philanthropy publishes another shallow investigation on tobacco control featuring tobacco taxation.
  • “While these numbers are all very uncertain (and rely on several questionable assumptions), the main takeaway is that cigarette tax advocacy can be very valuable but probably only clears the 1,000x bar if it affects a large smoking population or can be implemented cheaply with a high probability of success.”

Where do we go from here

In my (current) opinion, the best reason to be pessimistic about this intervention is that it could be absurdly hard to beat the tobacco lobby. The tobacco control space receives substantial funding and has multiple established INGOs. The fact that tobacco taxation is neglected could be a reflection that tobacco control orgs have already reached cost-effectiveness optimization, and its settling for other tobacco control concessions short of tobacco taxation because the tobacco lobby will fight the hardest against taxation.

Yet, there are reasons to think that the organizations in the tobacco control space have not reached optimization and that the space is undersaturated (see this graph for example). But to be fair, I’ve only seen consistent indicators that the tobacco lobby will be aggressive in every circumstance possible.

Regardless, these hypotheses have not yet had the chance to be tested, and neither has a tobacco-taxation organization guided by the effectiveness mindset.

Join Joel Tan, Founder of CEARCH, and myself for a discussion of the promise of tobacco taxation and pathways forward.

June 10^th (Saturday) 14:00 UTC

https://www.eventbrite.com/e/tobacco-taxation-the-intervention-that-got-away-tickets-647249399377

[1] Being in opposite time zones played into this.

[2] Results for HICs are tightly clustered whereas LMICs have more variation.

[3] Conditions: Nepal – 24% increase in tax, charity runs 4.75 years; Iran – 27.5% increase in tax, charity runs 6 years

[4] Conditions: Canada -- 25% increase in tax, charity runs 4 years

[5] Conditions: Mongolia -- 20% increase in tax, charity runs 5.5 years, 82.5% chance per year the government would enact that increase on their own

[6] The benefits of the intervention are current discounted over time by the odds per year that the government would enact the increase on its own.

[7] Also worth noting that seed grants for these orgs were 5X less than what CE seed grants currently typically amount to.