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The Economics of Tobacco in Egypt a New Analysis of Demand HNP DISCUSSION PAPER Public Disclosure Authorized Public Disclosure Authorized Economics of Tobacco Control Paper No. 8 The Economics of Tobacco in Egypt About this series... A New Analysis of Demand This series is produced by the Health, Nutrition, and Population Family (HNP) of the World Bank’s Human Development Network. The papers in this series aim to provide a vehicle for publishing preliminary and unpolished results on HNP topics to encourage discussion and Public Disclosure Authorized Public Disclosure Authorized debate. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. Citation and the use of material presented in this series should take into Heba Nassar account this provisional character. For free copies of papers in this series please contact the individual authors whose name appears on the paper. Enquiries about the series and submissions should be made directly to the Editor in Chief Alexander S. Preker ([email protected]) or HNP Advisory Service ([email protected], tel 202 473-2256, fax 202 522-3234). For more information, see also www.worldbank.org/hnppublications. The Economics of Tobacco Control sub-series is produced jointly with the Tobacco Free Initiative of the World Health Organization. The findings, interpretations and conclusions expressed in this paper are entirely those of the authors and should not be attributed in any Public Disclosure Authorized Public Disclosure Authorized manner to the World Health Organization or to the World Bank, their affiliated organizations or members of their Executive Boards or the countries they represent. The editors for the Economics of Tobacco Control papers are: Joy de Beyer ([email protected]), Emmanuel Guindon ([email protected]) and Ayda Yurekli ([email protected]). THE WORLD BANK WORLD HEALTH ORGANIZATION Public Disclosure Authorized Public Disclosure Authorized 1818 H Street, NW Avenue Appia 20 1211 Washington, DC USA 20433 Geneva 27, Switzerland Telephone: 202 477 1234 Telephone: 41 22 791 2126 Facsimile: 202 477 6391 Facsimile: 41 22 791 4832 Internet: www.worldbank.org Internet: www.who.int Tobacco Free Initiative E-mail: [email protected] E-mail: [email protected] March 2003 World Health Organization THE ECONOMICS OF TOBACCO IN EGYPT A New Analysis of Demand Heba Nassar March 2003 HEALTH, NUTRITION AND POPULATION (HNP) DISCUSSION PAPER This series is produced by the Health, Nutrition, and Population Family (HNP) of the World Bank's Human Development Network (HNP Discussion Paper). The papers in this series aim to provide a vehicle for publishing preliminary and unpolished results on HNP topics to encourage discussion and debate. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. Citation and the use of material presented in this series should take into account this provisional character. For free copies of papers in this series please contact the individual authors whose name appears on the paper. Enquiries about the series and submissions should be made directly to the Editor in Chief. Submissions should have been previously reviewed and cleared by the sponsoring department which will bear the cost of publication. No additional reviews will be undertaken after submission. The sponsoring department and authors bear full responsibility for the quality of the technical contents and presentation of material in the series. Since the material will be published as presented, authors should submit an electronic copy in a predefined format (available at www.worldbank.org/hnppublications <http://www.worldbank.org/hnppublications> on the Guide for Authors page) as well as three camera-ready hard copies (copied front to back exactly as the author would like the final publication to appear). Rough drafts that do not meet minimum presentational standards may be returned to authors for more work before being accepted. The Editor in Chief of the series is Alexander S. Preker ([email protected] <mailto:[email protected]>; For information regarding this and other World Bank publications, please contact the HNP Advisory Services ([email protected] <mailto:[email protected]>) at: Tel (202) 473-2256; and Fax (202) 522-3234. __________________________________________________________________________ The Economics of Tobacco Control sub-series is produced jointly with the Tobacco Free Initiative of the World Health Organization. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author/s and should not be attributed in any manner to the World Health Organization or to the World Bank, their affiliated organizations or to members of their Executive Boards or the countries they represent. The editors for the Economics of Tobacco Control papers are: Joy de Beyer ([email protected] <mailto:[email protected]>), Emmanuel Guindon ([email protected]) and Ayda Yurekli ([email protected]). For free copies of papers in this series please contact the individual author whose name appears on the paper, or one of the editors. Papers are posted on the publications pages of these websites: www.worldbank.org/hnp <http://www.worldbank.org/hnp> and www.worldbank.org/tobacco ISBN 1-932126-71-6 © 2003 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 All rights reserved. ii Health, Nutrition and Population (HNP) Discussion Paper ECONOMICS OF TOBACCO CONTROL PAPER NO. 8 THE ECONOMICS OF TOBACCO IN EGYPT: A New Analysis of Demand Heba Nassar Research Professor, Social Research American-American University in Cairo and Director of the Centre for Economic and Financial Research and Studies, Faculty of Economics and Political Science, Cairo University, Egypt. Paper prepared for the World Health Organization Tobacco Free Initiative, Eastern Mediterranean Regional Office Abstract: This study examines the economics of tobacco production and demand in Egypt. It reviews previous studies of demand for cigarettes in Egypt, consumption tends in Egypt, in the context of regional trends, and the data on tobacco-attributable diseases in Egypt.. It describes the structure and trends in cigarette production in Egypt, and the level of imports and exports. Part 2 uses household expenditure survey data from 1995/96 and 1999/2000 to look at levels and trends in household expenditures on cigarettes and other tobacco products, by income level, education, rural/urban residence, works status and occupation. The same data are used to analyse the demand for cigarettes and other tobacco products in Egypt, estimating expenditure (income) and price elasticities for the various population subgroups. The results are comparable to similar empirical estimates from other countries. The elasticities are used to simulate the likely effect on consumption of a rise in the price of cigarettes. The results of a survey of knowledge, attitudes and behaviors with respect to tobacco use of 559 university students are reported. Finally, Egypt’s tobacco control policies, activities and plans are described. Keywords: tobacco, tobacco tax, cigarette tax, economics of tobacco, economics of tobacco control, smoking, tobacco policy, price elasticity, expenditure elasticity, income elasticity, demand for cigarettes, shisha, tobacco employment, Egypt, knowledge, attitudes and behaviors on smoking, University students, tobacco use prevalence Disclaimer: The findings, interpretations and conclusions expressed in the paper are entirely those of the authors, and do not represent the views of the World Bank or the World Health Organization, their Executive Directors, or the countries they represent. Correspondence Details: Heba Nassar, Center for Economic and Financial Research and Studies, Faculty of Economics and Political Science, Cairo University, Guizeh, Egypt. Tel: (002 02)572-8055 572-8116 and (002 012) 218-3876 Fax: (002 02)568-9910, email: [email protected] iii iv Table of Contents Foreword........................................................................................................................................ 8 ACKNOWLEDGMENTS .......................................................................................................... 10 Executive Summary .................................................................................................................... 11 Part 1. General overview........................................................................................................... 14 1. Introduction..................................................................................................................... 14 2. regional trends in tobacco consumption....................................................................... 14 3. The Egyptian economy ................................................................................................... 14 4. Review of selected tobacco studies in Egypt ................................................................. 16 5. Smoking prevalence in Egypt......................................................................................... 17 6.
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