Differential effects of tobacco taxation across educational groups: evidence from Poland

Assessing the impact of the recent excise hike in Poland, with particular attention to differences between tertiary-educated and non-tertiary-educated populations.

We use the nationally representative Household Budget Survey data from 2010 to 2022 to estimate changes in smoking behaviour in response to cigarette affordability at both the extensive and intensive margins. Combining these estimates with European Health Interview Survey data, we simulate the effects of excise hikes for smoking prevalence and consumption in 2025-2027.

We find that the less-educated population exhibits a higher smoking prevalence but is more responsive to cigarette affordability. For the non-tertiary-educated population, a 10% increase in the ratio of cigarette price to income, that is, a 9.1% reduction in affordability, lowers the probability of households buying cigarettes by 0.61 percentage points (pp), translating into 2.2% fewer smokers. For the tertiary-educated population, such a decline in affordability reduces the probability of buying cigarettes by 0.24 pp and the number of smokers by 1.1%. The reduction of consumption volume among continuing smokers is also larger among the non-tertiary-educated population. We estimate that the excise tax roadmap adopted in 2024, securing a 21% tax increase by 2027, will reduce the number of smokers in Poland by about 250 000, reduce overall cigarette consumption by 8.4% and increase excise revenue by 10.9%.

In Poland, increases in the cigarette excise tax will reduce smoking prevalence and consumption volume mainly among the non-tertiary-educated population. Non-economic factors appear to primarily drive the decline in smoking prevalence among tertiary-educated people.